The fired CEO of Shufersal goes to battle for the compensation

Ofer Bloch is expected to go into battle this week against Shufersal after the company’s board of directors decided to approve Conducting a pre-dismissal hearing To the CEO who took office only last May, that is, two months ago.

On Thursday, “Calcalist” revealed that Aberkhan M.Move the move to oust Bloch. Bloch was furious and raised a voice in the company corridors about the move. That same afternoon, the board convened to discuss Bloch’s summons to a hearing on Monday.

At the end of the week, Bloch hired the services of the law firm Ardinst, and will be accompanied by the founder and head of the firm, Giora Ardinst, and Adv. Miriam Kleinberger, head of the firm’s labor law department. The team, if it does appear at the hearing and does not try to issue a restraining order in a labor court, will claim that Shufersal violated Bloch’s freedom of occupation and severely damaged his business reputation.

Bloch’s arguments will be not only inclusive but also individual, against each of the directors who approved his appointment and after a short period of several months voted in favor of his dismissal. He is expected to demand in court protocols to examine the way decisions were made about him. Another claim would be, apparently, that he was not given a real opportunity to prove his skills for the job and that his dismissal was due The whim of one man – Itzik Aberkhan.

Bloch and his lawyers are preparing for a fight, which may include an application for a restraining order against the dismissals, and a demand for the fulfillment of his contract in writing and in his own words, even if it is decided to terminate his employment. The terms of employment signed by Bloch were an annual salary of NIS 2.25 million, a bonus of up to NIS 1 million, and a share-based payment worth NIS 1 million. And a total annual salary cost of about NIS 4.3 million.

However, it seems that on a practical level Bloch and his lawyers understand that a workplace cannot be forced to employ him. The battle is expected to be over the scope of the package with which Bloch will leave.

The contract signed by Bloch is not impressive. He stipulates a payment of two months ‘adjustment in the event of dismissal in the first year of his employment, and four months’ salary from the second year. This means that Bloch signed an agreement in which Considered the possibility of being fired After a short time and this point does not play in his favor.

However, this section also deviates from Shufersal’s remuneration policy, which stipulates an adjustment grant only after two years. Bloch is also entitled to four months’ salary for prior notice. Bloch will also lose a package of options worth NIS 4.2 million.

Bloch can only dream of the conditions received by a manager at another company, Tower, in a similar situation. In March 2021, Migdal Bituach’s board of directors fired Moti Rosen as chairman after only three months, more than a month after Bloch. Rosen enjoys an unprecedented reward for three months of work in the amount of about NIS 3.5 million. An arbitration proceeding is underway between Rosen and Migdal regarding an additional 9 months of wage compensation for non-competition. Bloch compromised on a much less generous deal. In addition, Migdal is a company with a controlling shareholder, Shlomo Eliyahu. Thus, the company, with the support of the shareholders held by Eliyahu, could pass the unusual agreement at the shareholders’ meeting.

Shufersal is a company without a controlling interest. The institutional bodies holding its shares will allow only a slight deviation, if any, from the agreement. Bloch and Shufersal’s attorneys – represented by Adv. Ofer Tzur of Gornitzky – will most likely try to reach an agreement before a legal proceeding. .

At the two-hour board meeting, Ofer Tzur presented the reasons for the planned hearing and also answered quite a few questions raised by the directors: four incumbent deputies who appointed Bloch, and five new ones, including Aberkhan.

“Bloch was brought in to manage executives under him but this structure of a holding company no longer exists, and his tenure is not in the company’s favor in light of the hostility with Abercrombie,” Zur said. “There is the largest retail company in Israel whose value since Aberkhan left has dropped from close to NIS 8 billion to a value of just over NIS 6 billion. The period is not simple and the competitors are biting the company,” Tzur said in response to some questions. In the end, the decision was made unanimously.

The institutional bodies believe that Bloch consciously took a risk when he arrived at a company whose future is unclear, and relied on a chairman like Yaki and Damani who was very quickly moved at the initiative of the institutions after he moved CEO Abercrombie and appointed Bloch. Institutionalists also believe that Bloch was wrongly appointed due to the fact that he has no retail experience and that familiarity with Wadmani at the IEC helped him choose him.

“He wants to be protected like in the Histadrut when he earns a private sector salary? This is a joke. He just took a calculated risk to leave the management of the electricity company and be appointed to the company from the business sector and have to bear the consequences of this risk.” We did not see the private sector “He was courted during his ten years in the IEC,” an institutional source said at the weekend.

The agreement signed by Bloch is Shufersal’s strongest card, as it addresses the possibility of him being fired in less than a year, and in addition allows the company to fire him with four months’ notice from the first day in office.

Another clause implying that the possibility of him being fired quickly was on the table concerns Bloch’s bonus. “Notwithstanding the provisions of the remuneration policy, for the first year of employment the CEO will be entitled to a proportionate share of the grant in accordance with his term of office in the company, even if the term of office is less than seven months,” the contract states.

Another card is a weak parachute in case of dismissal. Unlike Avi Zvi, for example, who was fired from Partner with NIS 20 million after a year. In Bloch’s case, every shekel over six months’ salary – four months’ notice and two months’ adjustment – will be considered an exception. Bloch can only make claims to himself about the statement that he would agree to work under any chairman except Aberkhan.

Although he withdrew from the statement when Abercrombie’s path to the board seemed clearer. But that was after 3-2 months, not a short period of time. Too little and too late, Shufersal would argue.

Other claims that Shufersal is expected to make, and which relate materially to Bloch’s performance, deal with the fact that he is perceived as a man of Yaki and Damani and does his thing. As well as the fact that it lacks any retail experience and that milk management at Tnuva is not considered as such.

A key argument concerns the fact that Bloch was supposed to serve as CEO of Shufersal after it undergoes a structural change for a holding company, initiated by Damani, and will be staffed by professionals specializing in various fields, including food retail, led by Uri Kilstein. Of Kielstein, but indirectly allegedly tried to torpedo him until Kielstein decided to sign with a rival Carrefour. Presented some plan during his tenure even though he walked around Shufersal offices and branches a few months before he actually took office.

Shufersal will also claim that a hostile relationship has developed between him and Aberkhan, for which Bloch himself is responsible. “He was brought in to manage managers and not a domain, and now with Aberhahn’s appointment as chairman, it’s not practical.”

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Shufersal chairman Itzik Aberkhan. Will try to stop the departure of managers and the loss of market share

(Photos: Eran Granot, Abigail Uzi)

Abercrombie Who took up his position as chairman of Shufersal, Planning to oust Bloch even before he is elected and appoint Kilstein who left for Carrefour. The current candidate to replace Bloch, as was first revealed in “Calcalist” back in June, is Uri Waterman, CEO of Be’s pharma chain, and he will be appointed.

It is difficult to say that the two will be able to enjoy 100 days of grace, not even two weeks. They know the company and will be required for quick results in halting the network’s deterioration over the past six months. The coming months are expected to be difficult for Shufersal, and data released is expected to continue to lose market share. The test will be in the numbers of the following months.

In any case, the conduct of Shufersal’s board of directors, which included the three who left or were fired a long time ago – Ran Gutfreund, Yoav Shloshe and Ayelet Ben Ezer – together with the four deputies who appointed Bloch, resulted in an unnecessary expenditure of more than NIS 1 million from Shufersal’s coffers.