Israeli Tycoons Take Helm as CEOs Amidst Corporate Woes

Zvika Akerstein, a controlling shareholder of the Akerstein building materials and real estate group, has replaced the company's CEO, Amit Lang, citing "internal friction" and weak financial results. The company reported a 12% drop in revenue and a 48% decrease in net profit for the first half of 2026, with a significant 86% profit plunge in the second quarter. Akerstein's stock has also fallen 21% over the past year. Zvika Akerstein, who has taken over as CEO, stated that the company requires "focused management from the production floor" and that his family's belief is in their direct leadership to prepare the company for market opportunities.

This move by Akerstein follows a trend of controlling shareholders stepping in as CEOs in Israeli public companies. Recent examples include Efi Shakedi of Efi Capital, Ofer Yanai of Nofar Energy, Dana Azrieli of Azrieli Group, Shmuel Donerstein of Rav-Bariach, and the Amir brothers at Shufersal. These owners often cite underperformance, strategic divergence, or a lack of control as reasons for taking direct management roles, aiming to implement efficiency measures and steer the company towards their vision.

Experts suggest that owners often take direct control when there's a "trust gap" with a professional CEO, particularly when results are unsatisfactory or the company is perceived as moving too slowly. While some owners have successfully revitalized their companies, experts also warn of potential pitfalls, such as the erosion of checks and balances and the difficulty of challenging a dominant owner-CEO's decisions. The trend is also influenced by a perceived shorter commitment from hired CEOs, leading owners to step in for longer-term strategic goals.

However, the transition is not always smooth. Both Akerstein and Efi Capital have seen their stock prices continue to decline post-CEO replacement. Success stories, like Nofar Energy and Rav-Bariach, where owners took charge and implemented significant improvements leading to stock price surges, serve as benchmarks. The Azrieli Group saw its CEO depart shortly after taking the role, with speculation of limited operational freedom from the controlling shareholder. Similarly, the Amir brothers' takeover of Shufersal led to aggressive cost-cutting and a focus on core profitable segments, resulting in a significant stock price increase.

While some owners find success in direct management, the article highlights the inherent risks. The lack of independent oversight and the potential for unchecked decisions by an owner-CEO can weaken corporate governance. The article notes that while some owners may eventually transition back to a more supervisory role, the current trend reflects a complex dynamic between ownership, management, and market expectations in the Israeli corporate landscape.