3 ex-Bank Leumi execs to return millions in bonus money
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3 ex-Bank Leumi execs to return millions in bonus money

(JTA) — Three former senior executives at Israel’s Bank Leumi will repay the company a total of 5.1 million shekels (approximately $1.3 million) in the wake of a massive tax evasion scandal.

An external report commissioned by Bank Leumi’s board of directors and released on Monday found that former CEO Galia Maor, former chairman Eitan Raff and former International and Private Banking head Zvi Itskovich should return money they received as part of their bonuses from the years 2002 to 2010.

The bank, Israel’s second largest, paid $400 million in a settlement reached last December over an investigation into tax evasion schemes that involved American clients. Bank Leumi paid the U.S. Department of Justice and the State of New York $270 million and $130 million respectively.

The 5.1 million shekels represents roughly 11 percent of the bonus money paid to the three executives over an eight-year span.

The committee acknowledged that the requested repayment is not a large sum but noted that the former executives did not breach their fiduciary duty to the bank.

The report also recommended that the bank recoup $92 million worth of insurance policies covering board member actions.

Bank Leumi accepted all of the report’s recommendations. Maor, Raff and Itskovich agreed to pay the settlement.

“The officers believe that in their conduct at the bank in relation to the management of the accounts of US customers, they acted in accordance with the law and with accepted banking practice in Israel and around the world,” they said in a joint statement. “Nevertheless, at this stage in their lives, and in order to bring the matter to a complete and final conclusion, in all its aspects, the officers have expressed their agreement to the committee’s request.”