Bank Leumi CEO warns: Wage limit hurts banks

“The executive pay law is wrong, certainly when it discriminates against the financial sector and also reaches the middle management levels. In the short term we know how to retain and recruit employees, because this is a coveted job in banking. But over time the problem will grow, especially in technology professions.” This is what Bank Leumi CEO Hanan Friedman said yesterday at the accounting conference in Eilat.

Referring to the issue of reducing the salaries of bank chairmen, he added: “There are advantages to banks managed without a core of control, because the responsibility for the board and its chairman is much greater compared to companies with a landlord. When there is responsibility you also need authority and compensation accordingly.”

Hanan Friedman (Photo: Kfir Sivan)

“Friedman believes that the bank’s directors’ salaries should be higher and based on capital compensation as options, so that their desire to succeed will be higher.”
Leumi CEO says that the housing market is in difficulties that could create a social problem. He estimates that prices will rise by 10% this year, but in his opinion there are no magic solutions to the problem.

Friedman added: “It is not possible to continue in the current situation with dramatic increases, so in the short term a model that has already been implemented in London should be adopted: turning office buildings into residential buildings in a very short procedure. All approvals will be received within a month and the project will be completed within 18 months. “In a process that will be reminiscent of urban renewal. There will be enough entrepreneurs to choose this route, and within two years there will be many more housing units that will help resolve the crisis.”

The CEO of Bank Leumi claims that competition in banks is high, while the level of prices and interest rates in Israel are low compared to the United States and Europe. In his estimation, open banking and the entry of more players into the market will increase competition. “The non-banking entities compete with us in high-risk places, where we are not thrilled to be anyway,” he said.

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