Half a year after the bitter dispute broke out between Bank Hapoalim and the executives of the underwriting company Poalim IBI in which it owns, the bank informed the company that it is being asked to remove his name from its name. In a letter sent by Poalim Equity, through which the bank’s shares are held in the underwriting company, Poalim IBI is required to act to remove the name “as soon as possible and without delay”. In response, the stock fell I.B.I. workers About 8% during trading on Wednesday – perhaps due to the fear of losing business coming to the company from the bank that owns it. At the center of the dispute between the parties was the approval of the salary conditions for IBI executives, contrary to the bank’s opinion and the decision of the company’s general meeting.
● In contrast to Bank Hapoalim’s position: Poaleim IBI approves compensation for its executives of approximately NIS 22 million
● The authorities overturned the salary upgrade of the three senior IBI workers
● Rewards of tens of millions of shekels: the underwriters who upset Bank Hapoalim
In a letter on behalf of the chairman of Poalim Equity, Yadin Entavi, and the CEO Kobi Shalom, the two also state that the bank also waives the right to appoint a director in the underwriting company, and that they leave it to the company’s discretion to continue the tenure of the director appointed by the bank in the past, Ofer Levy.
The letter and the unusual demands raise a question mark regarding the bank’s continued holding in the underwriting company (about 25% of the shares, the second largest shareholder after the IBI investment house). It seems that the questionable relations may indicate the end of the partnership, when Bank Hapoalim began a preliminary examination of the possibility of establishing an independent underwriting arm.
Bank Hapoalim objected to the salary upgrades of the acting IBI executives
Last April, Bank Hapoalim the bank sent an unusual letter in its severity, on the eve of the meeting of shareholders of Hapoalim IBI, which was intended to approve an upgrade in the salary conditions of three of its senior executives – CEO Yaron Mozes and the directors of the subsidiary that coordinates its underwriting activities, Ofer Greenbaum and Shay Nebo – So the cost will be NIS 22 million per year, for all three of them.
In the letter, the bank strongly objected to the approval of the salary and stated, among other things, that this was an “exceptional and inappropriate course of action that causes serious and disproportionate harm to the company’s shareholders, including Bank Hapoalim.” From an examination of the bank’s value, it was found that in reference to the year 2021, these three office bearers “receive an annual remuneration equal to almost 25% of the company’s revenues, and in terms of profit – an amount that represents approximately 35% of the profits”.
IBI executives stated at the time that the salary conditions reach the executives due to their “significant contribution to the company, as manifested during their years of service.” In the company’s response, it was further mentioned that “unlike many other fields, the company’s success is largely based on the ability, expertise, connections and personal reputation of its leading factors.”
In the end, the salary of the three executives was approved in May, even though the required majority (among the minority shareholders) was not obtained at the shareholders’ meeting. This is after the board of Poalim IBI carried out an “over-rolling” for the assembly’s decision and approved the salary. Poalim IBI is considered one of the largest underwriting companies in the market, and its market value currently stands at approximately NIS 230 million.
At the same time as the demand to remove his name, Bank Hapoalim is already transferring the “earnings” that they kept until now for Hapoalim IBI to another party. The bank plans to raise bonds in the amount of up to 2.5 billion shekels, with the Orion company led by Erez Goldmscheidt (former CEO of Poalim IBI) serving as the lead underwriter of the move.