One of the biggest secrets on the Tel Aviv Stock Exchange (TASE) is the salaries of the top executives of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), the largest Israeli company in the world, and the company with the greatest weight on the Tel Aviv 25 Index. 12 years ago, Teva exploited the dual listing law to switch to reporting under US law, filing financial reports and statements as a foreign company listed on Wall Street, rather than as an Israeli company listed on the TASE.
As a consequence, Teva stopped disclosing the salary cost of its five highest paid executives (under Amendment 21 of financial reports), and for 13 years (2000-12), it has not been possible to know the salaries the company pays its executives, especially its CEOs during this period (the late Eli Hurvitz, Israel Makov, and Shlomo Yanai).
Although Teva has broken no law, either in the US or in Israel, non-disclosure of its executives' salary costs led corporate law experts Prof. Sharon Hannes and Prof. Ehud Kamar to file a lawsuit, which has been requested to be recognized as a class action suit. They contend, "The company has violated its duty to disclose in its financial statements the compensation paid to its top executives and directors."
In November 2012, "Globes" reported that Hannes and Kamar petitioned the court to order to compel Teva to disclose the remuneration paid to its executives since 2000 (when it stopped doing so), and to disclose the remuneration henceforth.
Sources inform ''Globes'' that Teva's management is not belittling the lawsuit, (even though the company is acting legally under the dual listing law), and it is considering responding to the lawsuit, at least partly, and to publish the salary cost of its five highest paid executives over the past three years. So far as is known, Teva president and CEO Jeremy Levin, who has been in the post for nine months, favorably regards the lawsuit, and as a man used to the disclosure laws of Wall Street, considers it proper to give public expression to the company's salary policy.
No final decision has been taken on the matter, which will be discussed by the board when approving the financial report for the final quarter of 2012.
Levin has reportedly informed Yanai of the step that could be taken, which would affect him as he was CEO from 2007-2012.
An examination by "Globes" found that before 2000 when Teva did publish figures for the salaries of its senior executives, it was never at the top of the Israeli salary rankings."
In response Teva said, "The company does not comment on pending legal proceedings outside of court."
Published by Globes [online], Israel business news - www.globes-online.com - on January 27, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013