Electra CEO Threatens Departure Over Salary Dispute

A significant dispute is unfolding at the top of the infrastructure group Electra, where CEO Itamar Deutscher is demanding an annual salary of 17 to 18 million shekels. Deutscher, who has led the company for 21 years and overseen its growth from 300 million shekels to approximately 8.5 billion shekels in value, has threatened to leave if his demand is not met. The company's board of directors and controlling shareholders, the Zalkind brothers, are currently in intensive negotiations with institutional investors to approve an exceptional compensation package for Deutscher. The goal is to retain the highly regarded CEO until the age of 70, with the chairman, Miki Zalkind, attempting to forge a seven-year agreement valued at around 126 million shekels, including substantial equity compensation payable at the end of the term.

Electra is reportedly trying to secure prior agreement to avoid overriding shareholder votes, a move that has drawn sharp public and legal criticism in the past. However, the path to approval is fraught with obstacles, as institutional investors are hesitant to approve the exorbitant demands. Despite Deutscher's extensive experience in managing the complex infrastructure market, recent company results, including declining profits and underperforming stock relative to benchmarks, are seen by investors as insufficient justification for such an extreme deviation from standard compensation levels.

Currently, institutional investors are willing to consider packages significantly lower, ranging from 10 to 15 million shekels. As the board is avoiding bypassing the shareholder vote this time, the balance of power has shifted. The outcome remains uncertain, with the possibility of Deutscher compromising or following through on his threat to resign.