What will be communicated as a “victory” of the institutional bodies, in the talks they had recently with the chairman Shufersal The incoming Itzik Abarkhan will join the retail chain with a significant addition to his retirement terms. This addition will offset most of Abarkhan’s waiver of a retroactive grant of NIS 2.5 million.
■ Following the audit: these are the new salary conditions of Shufersal chairman Itzik Abarkhan
■ Abarkhan will receive a retroactive grant of NIS 2.5 million and options for NIS 10 million
■ Weak performance and managerial instability take a toll: Shufersal’s retail profits plunged by 60%
Abarkhan left the position of CEO of Shufersal at the end of last March, amid disputes with the chairman Yikki Vedmani (who has since resigned due to the lack of confidence in him by the major shareholders of Shufersal).
Abarkhan recently returned to the network as an active chairman, with the support of the institutional bodies that own Shufersal, after several stormy months of upheavals at the management level. The terms of employment that Shufersal asked him to approve, which were reported last month, included, among other things, the same unusual bonus – which was justified by the waiver of part of the adjustment period She was eligible as part of the terms of his employment as CEO.
“In light of the fact that Abarkhan waived an adjustment period of three months, and in light of the fact that he returned to the company in a new position, and before the discussions and procedures regarding the sums that will be awarded to Abarkhan as retirement grants for his many years in the company, including over ten years as CEO, have been completed, it is proposed to pay Abarkhan for the years His tenure as CEO will be a one-time special grant, which will actually be paid soon after the approval of the assembly,” the report said.
However, that grant provoked public criticism and discomfort among the institutions that own the company’s shares (and which led to the appointment of Abarkhan to the position of chairman). After negotiations between the parties, as mentioned, the company this week published Abarkhan’s updated salary conditions – as they were revealed on the Globes website on Sunday – As part of a summons to a shareholder meeting that will take place next Thursday, the terms of employment of Abarkhan and the chain’s new CEO Uri Weterman will be brought to the meeting for approval.
Current salary conditions have not changed in the current update
The subpoena shows that instead of the canceled grant, nine more months of salary were added to the chairman that he will receive after his retirement – an advance notice period that increased from three to six months, in addition to their six months of adaptation, Abarkhan will be eligible after at least two years in the position.
The bottom line is that this is a relatively minor decrease in the amounts that Abarkhan will receive, who has now been promised compensation in the amount of 12 months’ salary after his retirement, at a cost of NIS 2.3 million, while the value of the compensation package he requested last month (bonus and advance notice) was approximately NIS 3.1 million.
What has not changed in the current update are the terms of Abarkhan’s current salary, which will be NIS 191,000 per month (similar to his salary when he served as CEO, corresponding to 80% of the position), a cost that includes NIS 2.5 million in share compensation – options that will mature over four years, which is worth The total is estimated at NIS 10 million.In total, the cost of his salary will be NIS 4.8 million per year.
Shufersel operates without a core of control, and six institutional entities – Migdal, Altshuler Shaham, Menorah, Clal Insurance, Fenix and Harel – each own about 10% of its share capital.
“This bonus was canceled more because of the way the institutional bodies work than because of the criticism of the grant,” says an official familiar with the details. “The institutions must discuss individually in their investment committees, and it is more convenient for them to discuss advance notice conditions and retirement conditions. Abarkhan’s case is unusual, because there was still an employee-employer relationship, which created an occupational continuum. He served as CEO until March of this year and returned in June as chairman – so he is still an employee of the company.”
“Less a matter of a message – more of a sign for the future”
Was there a message in canceling the retroactive bonus?
“It’s less a matter of a message and more of a blueprint for the board of directors for the future, which concerns what the institutions can effectively regulate between themselves. There was a fear that they would reach a similar situation in another four or five years on the day another chairman arrives, again with the matter of an adaptation grant as it was. Therefore, it was more convenient for the investment committees to discuss the addition of months of advance notice and the transfer of retirement conditions to the future. It’s a compromise that’s convenient for both parties.”