The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Tue, 07 Apr 2026 15:18:02 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Israel’s Executive Compensation Reform – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Israel’s Executive Compensation Reform https://corpgov.law.harvard.edu/2013/01/07/israels-executive-compensation-reform/?utm_source=rss&utm_medium=rss&utm_campaign=israels-executive-compensation-reform https://corpgov.law.harvard.edu/2013/01/07/israels-executive-compensation-reform/#comments Mon, 07 Jan 2013 14:09:12 +0000 http://blogs.law.harvard.edu/corpgov/?p=38261?d=20150113134212EST Posted by Avi Licht, Ronnie Talmore, and Haim Sachs, Ministry of Justice, Israel, on Monday, January 7, 2013
Editor's Note:

Avi Licht is Deputy attorney general, and Ronnie Talmore and Haim Sachs are attorneys at the Ministry of Justice, Israel. The writers of this post advised the committee established by the Justice Minister in the formulation of Israel’s Executive Compensation Reform.

Foreword

The issue of executive compensation has been on the forefront of corporate governance discussion around the world in the past few years. Israel is no different. In previous years there was a significant rise of executive compensation in public companies that cannot be explained or linked to the companies’ performance.

Like many capital markets in continental Europe and other countries around the world, [1] most of the companies traded on the Tel-Aviv Stock Exchange have a controlling shareholder. A significant portion of these companies are controlled by a limited number of business groups, the majority of which are characterized by pyramid control structures.

Concentrated ownership and dominance of company groups raise a key agency problem: the relationship between controlling shareholder and the minority shareholders. The issue of protection of minority shareholder rights and the prevention of abuse of the controlling power is therefore a subject of main consideration in Israel.

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