Tel Aviv Stock Exchange Unveils Ambitious Growth Plan, CEO Retention Package Sparks Debate
The Tel Aviv Stock Exchange (TASE) saw its stock surge over 10% following the announcement of a new five-year strategic plan targeting 15%-18% average annual revenue growth through 2031, a significant increase from the previous 10%-12% target. If successful, this plan aims to nearly double the exchange's current annual revenues to approximately 1.34-1.52 billion shekels by 2031, potentially leading to annual profits of 520-590 million shekels, assuming current net profit margins of nearly 39% are maintained. The new strategy moves beyond traditional trading and clearing fees, exploring dual-currency trading, extended trading hours to overlap with Wall Street, increased engagement with foreign investors and brokers, new products and indices, enhanced market-making mechanisms, and leveraging data analytics and AI. The exchange also plans to explore asset tokenization.
This strategic push comes after a period of volatility for TASE's stock, which had risen to nearly 16 billion shekels in late May but subsequently dropped by a third, before the recent surge brought its valuation back to around 13 billion shekels. The exchange reported strong performance in the second quarter of 2026, with revenues up 36% year-over-year and net profit soaring 81%. TASE has also been actively promoting market making, launching new indices and products, and improving liquidity to attract foreign investors.
Alongside the ambitious growth targets, TASE's board is proposing a retention package for CEO Itai Ben-Zeev, who has led the exchange through recent years of development. The package includes a 3.5 million shekel loan, forgivable after five years and eight months if Ben-Zeev remains with the company until June 2032, and 46,815 options with a strike price of 240 shekels, vesting after five years. The board argues this is necessary to ensure Ben-Zeev's continued leadership in executing the new strategy. However, questions are being raised about the necessity of additional incentives, given Ben-Zeev already holds approximately 3.7% of TASE's shares, valued at nearly half a billion shekels, accumulated through previous compensation and option exercises.
The board is also seeking to formalize equity-based compensation for directors, proposing options for the chairman and other board members, and making the current pilot program a permanent framework. This includes potential annual compensation packages, reimbursement for international travel expenses up to $75,000 for non-resident directors, and other benefits. Critics point out that TASE operates as a monopoly in Israel's capital market, controlling liquidity conditions and market-making mechanisms while benefiting from increased trading volumes and derivative products. While acknowledging the exchange's improved efficiency and international alignment under Ben-Zeev's leadership, the article questions the appropriateness of substantial additional compensation for a CEO who already possesses significant personal wealth tied to the company's performance, urging shareholders to consider the matter carefully.