There are still some good managers in Israel, but there are few good managers who also have good values, which is a reason for the problem of executive salaries. El Al Israel Airlines Ltd. (TASE: ELAL) CEO Eliezer Shkedi, who gave up half his annual bonus in favor of the airline's employees, has shown that there is another way.
El Al posted a net profit of $57.1 million in 2010, compared with a net loss of $76.3 million in 2009. A company that swings from losses to strong profits is no small achievement in itself, and demonstrates Shkedi's management skills. But there are other good managers in the market. What the market lacks, however, are good managers who are also men with good values.
Now along comes the CEO of El Al, who tells the board of directors that half the bonus he is due on the basis of the airline's results, he will write out in favor of the airline's employees. Shkedi is reportedly giving up almost NIS 6 million. We can assume that Shkedi's life style won't suffer from his generosity, but we know that no one, not even the wealthiest amongst us, readily parts with money accruing to him.
Executive salaries are not falling off the national agenda, and, so far, none of the proposed solutions are taking practical shape. Maybe Shkedi's act will be a landmark to learn and emulate. Let executives make large salaries, but some of it should go toward fostering employees and their wellbeing.
At company celebrations and ceremonies, managers like to praise employees and cite their share in the company's success and achievements. They speak, but do not act. Shkedi's act shows that it is possible to act differently.
Published by Globes [online], Israel business news - www.globes-online.com - on April 4, 2011
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