Africa Israel execs to get NIS 7M in bonuses

According to a statement released by the company, the “members of the directorate decided to approve a special award to the managers who led the many business moves in the company and should continue to ensure their implementation, led by Africa Israel Investments CFO Ron Fainaro and Africa Israel Investments CEO (USA) Rich Marin.”

Fainaro will receive a grant of NIS 1.25 million (about $327,000), Marin will receive $1.25 million, and another five executives will receive NIS 900,000 ($236,000). The bonuses total NIS 7 million ($1.8 million).

The sums were determined by a directorate committee that included two non-executive directors, as well as an observer on behalf of the company’s debtors.

The company also reported that “throughout the discussions on this topic, the company consulted, inter alia, CompVision, an external consulting firm that deals with executive awards, which prepared a database to analyze and compare the grants under question.

"Beyond the initial database that was prepared before the compensation committee began its work, an expert opinion was requested from Prof. Moshe Zviran, including bonus figures about compensation of executives in leading companies.”

The company also reported that none of the members of the board of directors objected to the grants.

'Expression of trust in our executives'

Africa Israel CEO Izzy Cohen said in a company statement, “Africa Israel has had a tough two years due to the financial and real estate crisis that hit the world, throughout which it had to deal with depreciation of asset value, capital erosion and damaged cash flow in the company as well as reaching a complex debt arrangement.

"During this period the company needed good, experienced managers who worked well under conditions of economic pressure, in days of uncertainty and knew how to steer the company to its safe haven – a place from which it can successfully re-grow.”

Cohen added that “these executives, who worked day and night to stabilize the company, earned the right to this special award. Over the last two years, the company did not give any bonuses at all to its executives and employees, as we thought it was not right to do so at such times of trouble. Today, after completing the debt arrangement, and with the company making a recovery, once again carrying out and completing projects and looking into the future with confidence, we think that the people who led the company can be thanked.

“This bonus is, first and foremost, an expression of our trust in our executives and of our gratitude to them, besides the company’s commitment to ensuring that the best people remain with us and lead the company towards unlocking its value for its shareholders and fulfilling its commitments. I would like to thank the board of directors and the chairman, for its decision to back my proposals for this special award.”

Board of directors: Reasonable bonus

The board of directors explained the bonus given to Fainaro, saying that “Fainaro’s contribution was decisive in reaching the arrangement between the company and the bondholders and with the various banks.

"In addition, Fainaro filled his duties managing the finance department and accounting under complex circumstances, while improving procedures and upgrading sub divisions that deal with taxation, financial auditing and risk management.

"According to figures obtained by the company and its viewpoint, offering a special bonus for reaching a debt arrangement is reasonable, especially when noting the scope and complexity of the company’s arrangement.”

The board explained Marin’s bonus as well: “Marin initiated and led each of the loan settlements and their rearrangement in each of the Africa Israel projects in the USA, and in particular the New York Times building project, the debt arrangement which generated profits to the company group of about $400 million.

"Marin led and was involved in all the negotiation proceedings to realize assets of Africa Israel (USA) and to buy loans and erase guarantees of about $200 million, both of the company and of Africa Israel (USA).

“Marin started serving as CEO Africa Israel (USA) after it was in crisis due to its assets devaluating and therefore any involvement in the crisis should not be attributed to him. In addition, Marin was responsible for rebuilding the executive team of Africa Israel (USA) and he succeeded in forming a professional, skilled, and high-leveled team under his management.”

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