Managerial Wages

Managerial Wages


In 2010, the Israeli Institute for Economic Planning presented to the Ministry of Justice a position-paper stating its stand on statutory restrictions on executive-compensation.

The Institute's position is that the involvement of the government on the private corporation’s wage policy reflects an aggressive government intrusion, way beyond the usual scope of government intervention in the conduct of corporations in the Western world and will affect the competitiveness of Israel as a target for companies’ association.

The Institute suggests that investors and financial institutions should make their own choices about the attractiveness of investment in companies by considering their efficiency. However, the institute noted that there is one place to intervene on executive-compensation and it is in affiliated group companies built as pyramids.  The Institute’s proposal was that on these companies a mechanism of wages subject to long-term performance will be determined.