Israel passes law to cap bankers’ salaries

Israel has introduced one of the world's toughest curbs on bank executives' salaries to try to narrow a big gap between bosses' and workers' pay. The law was pushed through by Finance Minister Moshe Kahlon, who, ahead of last year's election, ran on a platform of lowering the cost of living and reforming Israel's banks. It was approved in Parliament overnight in a 56-0 vote and will take effect in six months. Bankers' pay is a sensitive issue in Israel, especially since banks make large profits partly from a wide variety of fees on such things as deposits and withdrawals. According to Parliament's finance committee, salaries at financial firms have grown substantially in recent years and a quarter of the 40 public companies in Israel with the highest pay levels are financial ones. "There is a moral significance beyond the economic significance in this law," Kahlon said. "It symbolises narrowing pay gaps, solidarity and consideration for the weak." Under the new law, which also applies to insurance companies, total compensation will be capped at 2.5 million shekels (€576,739) a year, or no more than 44 times the salary of the lowest worker at the company. Anything above the...

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