Tel Aviv Stock Exchange Seeks to Approve $1 Million Retention Bonus for CEO

The Tel Aviv Stock Exchange (TASE) is requesting shareholder approval for a new retention bonus package for its CEO, Itay Ben-Zeev, totaling 3.5 million shekels (approximately $950,000 USD) in a conditional loan, plus options valued at 1.5 million shekels (approximately $400,000 USD). This loan is structured so that Ben-Zeev will receive the funds in November of this year but must repay the full amount if he voluntarily leaves TASE within the next five years. This is in addition to two similar loans he received in 2019 and 2023, the former of which has already converted to a bonus and the latter is set to convert in 2028, provided he remains CEO. In total, Ben-Zeev's conditional retention bonuses since becoming CEO would amount to 10.5 million shekels (approximately $2.8 million USD).

Ben-Zeev will also receive 46,800 options that will fully vest in five years. TASE has set an ambitious target for exercising these options: an 88% increase in the company's share price within five years, reaching 240 shekels per share. This would value the company at 22.3 billion shekels (approximately $6 billion USD), compared to its current valuation of 11.9 billion shekels (approximately $3.2 billion USD). While this target is significantly higher than the minimum requirement, historical performance of TASE's stock and relevant indices over the past five years has shown substantial growth, with the stock itself rising 800% and the TA-Finance index up 297%.

Since Ben-Zeev took office in 2017, TASE's stock has surged by 1,595% since its public offering in August 2019, reaching its current valuation. This performance has significantly benefited Ben-Zeev, who owns 3.7% of TASE shares, currently worth approximately 439 million shekels (approximately $118 million USD). This stake was acquired through the exercise of options granted in 2019. He also holds additional options granted in June 2023, which could yield him an additional paper profit of up to 48 million shekels (approximately $13 million USD).

TASE is also seeking shareholder approval for Chairman Eugene Kandel to receive 35,400 options valued at 1 million shekels (approximately $270,000 USD), with an exercise price 30% above the current share price. Additionally, the exchange proposes appointing Kfir Gudrich, former head of global technology at BlackRock, as a director. To accommodate international directors, TASE seeks to allow annual expense reimbursements of up to $75,000 USD for travel and accommodation for board meetings.

These proposals coincide with TASE's unveiling of a new strategic plan aimed at transforming into a public holding company. This structure will separate TASE's exchange operations, clearinghouse, index management, and technology divisions, facilitating acquisitions and expansion into new areas. The plan also includes establishing trust and administration services for funds and diversifying revenue streams beyond trading and clearing, targeting 15%-18% annual revenue growth to reach approximately 1 billion shekels (approximately $270 million USD) in revenue by 2028.