A Vexing Question in Israel: Are Bankers Being Overpaid

Are Israel’s bankers overpaid, in the context of the country’s salary scale? Tel Aviv University Prof. Aryeh Globerson thinks so and the Knesset and the public want to know. But figures released by the Knesset Finance Committee Monday, instead of answering the question, sparked further debate.

They showed that the 10 top-ranking officials of Bank Leumi earn gross salaries in the Shekel equivalent of $8,000 a month, apart from their expense accounts, company cars and telephone bills which are paid by the bank.

Other leading banks are less generous. The Histadrut-owned Bank Hapoalim pays its top executives an average of about $4,000 a month, plus cars and other perquisites. This is a far cry from the remuneration received by bankers.

Likud Liberal MK Pessah Grupper said the figures were “not out of line for Israel.” He said many executives in the private and public sectors earn more, “so what is all the fuss about?”

But Haim Ramon, the ranking Laborite on the committee, said the salary figures were misleading because they did not include the expense accounts and “perks” which significantly increased the bankers’ income. He noted that since the collapse of bank shares in the October 1983 financial panic, the solvency of the country’s leading banks has been guaranteed “by the public purse.”

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