Israel plans financial sector pay overhaul
JERUSALEM, July 1 (Reuters) – Israel’s Finance Ministry said on Wednesday financial institutions in the country would have to pay employees compensation based on long-term performance, as part of global efforts to stem excessive short-term risk taking.
The decision by Yadin Antebi, the ministry’s commissioner for capital markets, follows similar action by regulators around the world in light of the global financial crisis.
The financial meltdown had been partly sparked by “inadequate” long-term compensation paid to employees of large financial institutions abroad, Antebi said in a statement.
Such practices encouraged employees to take increased risks, which in turn threatened the stability of global financial markets.
“In Israel, the impact of the global crisis as well as the competition between financial institutions, make it necessary to arrange the system of compensation for managers in financial institutions,” the ministry said, without providing further details.