Citi Fun 29 Regulatory News (AD49)

31 Mar 2008 08:02

Leumi International Investments NV31 March 2008 BANK LEUMI LE-ISRAEL B.M. (GUARANTOR - GUARANTEED EURO MEDIUM TERM NOTE PROGRAMME OF LEUMI INTERNATIONAL INVESTMENTS N.V.) Translation of Immediate Report Bank Leumi le-Israel B.M. Registration No. 520018078 Securities of the Corporation are listed on The Tel Aviv Stock Exchange Abbreviated Name: Leumi Leumi House, 34 Yehuda Halevi Street, Tel Aviv 65546 Phone: + 972 3 5148111, + 972 3 5149419; Facsimile: + 972 3 5149732 Electronic Mail: jennifer@bll.co.il 31 March 2008 To: Israel Securities Authority (www.isa.gov.il) The Tel Aviv Stock Exchange (www.tase.co.il) Immediate Report regarding an Event or Matter falling outside the Ordinary Course of Business of the Corporation Pursuant to Regulation 36(a) of the Securities (Periodic and Immediate Reports) Regulations, 1970 Nature of the Event: Compensation of Senior Officers Bank Leumi le-Israel B.M. (the "Bank") hereby announces: On 30 March 2008, following the approval of the Audit Committee, the Board ofDirectors of the Bank approved, as detailed below, compensation in respect of2007 for: Mr. Eitan Raff, Chairman of the Board of Directors (subject to theapproval of the General Meeting), Mrs. Galia Maor, President and Chief ExecutiveOfficer, Mr. Zeev Nahari, Senior Deputy Chief Executive Officer, all the othermembers of the Management of the Bank and the Chief Internal Auditor (the"Bonuses to the Chairman of the Board of Directors and the Management"). Pursuant to the Directive of the Israel Securities Authority regardingdisclosure relating to the approval of compensation of senior officers, thefollowing details are provided by the Bank: 1. Payment of the Bonuses to the Chairman of the Board of Directors and theManagement was discussed at a number of meetings of the Compensation Committeeof the Board of Directors, and a number of meetings of the AdministrationCommittee of the Board of Directors, was discussed and approved by the AuditCommittee of the Board of Directors on 30 March 2008, and following discussionsheld by the Board of Directors of the Bank on 26 February 2008 and 17 March2008, was approved by the Board of Directors on 30 March 2008. Payment of thebonus to the Chairman of the Board of Directors is subject to the approval ofthe General Meeting of the Bank. 2. The financial results of the Bank for 2007 were presented to the said organsof the Bank, together with comparisons with recent years and comparisons withavailable financial results of other banks in the system. In addition, financialdata was presented regarding the terms of employment and bonuses paid to theChairman of the Board of Directors, the President and Chief Executive Officerand the Management of the Bank in previous years, as well as data, to the extentthat it had been published to the public, regarding bonuses, salary and benefitsgranted to the chairmen of the boards of directors, the chief executive officersand the members of the management of other banks, other companies in the Israelicapital market, and other relevant companies in the Israeli economy. Inaddition, evaluations were presented regarding the achievements of each of thesenior officers in 2007, and their achievement of the strategic goals set in theannual business plan. 3. Amounts of the Bonuses Approved in respect of 2007: 3.1 Chairman of the Board of Directors Following consideration and discussions by the Audit Committee and the Board ofDirectors regarding the annual bonus of the Chairman of the Board of Directors,after consideration, inter alia, of the background material presented to them,and of the recommendations of the Compensation Committee and the AdministrationCommittee of the Bank, and having received a report on the position of theShares Committee of the Bank, the Audit Committee and thereafter the Board ofDirectors resolved to approve an annual bonus for the Chairman of the Board ofDirectors in the amount of NIS 4 million. 3.2 President and Chief Executive Officer Following consideration and discussions by the Audit Committee and the Board ofDirectors regarding the annual bonus of the President and Chief ExecutiveOfficer, after consideration, inter alia, of the background material presentedto them, and of the recommendations of the Compensation Committee and theAdministration Committee of the Bank, the Audit Committee and thereafter theBoard of Directors resolved to approve an annual bonus for the President andChief Executive Officer in the amount of NIS 6 million. 3.3 Senior Deputy Chief Executive Officer Following consideration and discussions by the Audit Committee and the Board ofDirectors regarding the annual bonus of the Senior Deputy Chief ExecutiveOfficer, after consideration, inter alia, of the background material presentedto them, and of the recommendations of the Compensation Committee and theAdministration Committee of the Bank, as well as the recommendation of thePresident and Chief Executive Officer, the Audit Committee and thereafter theBoard of Directors resolved to approve an annual bonus for the Senior DeputyChief Executive Officer in the amount of NIS 3.5 million. 3.4. Members of the Management of the Bank Following consideration and discussions by the Audit Committee and the Board ofDirectors regarding the annual bonus of the members of the Management, afterconsideration, inter alia, of the background material presented to them, and ofthe recommendations of the Compensation Committee and the AdministrationCommittee of the Bank, as well as the recommendation of the President and ChiefExecutive Officer, the Audit Committee and thereafter the Board of Directorsresolved to approve an annual bonus for 11 senior officers of the Bank(including the Chief Internal Auditor and two senior officers who resigned fromthe Bank in 2007), in the aggregate amount of NIS 15,425 thousand. 4. The Rationale for Granting the Bonuses The considerations forming the basis for the resolutions of the Audit Committeeand the Board of Directors regarding the granting of the Bonuses to the Chairmanof the Board of Directors and the Management in respect of 2007 and thedetermination of their levels, included: 4.1 2007 was a special year during which the senior officers led the Bank tooutstanding achievements, and to the best results out of the five largest banksin the system(1), and made the Bank the most profitable bank in the system. Net operating profit increased from some NIS 1.454 billion in 2006 to some NIS2.984 billion in 2007 - the year in which the Bank achieved the highest netoperating profit in its history. Net return of net operating profit onshareholders' equity rose from 8.3% in 2006 to 15.4% in 2007. 4.2 The outstanding results in 2007 were achieved, inter alia, by implementationof the strategic business plan of the Bank, new planning by the Bank in light ofthe implementation of the reform in the capital market, improving the quality ofthe credit portfolio while reducing the rate of provisions, reducing the volumeof problem loans and determining responsible business policies, while exercisingcaution with regard to investments in financial products involving high risk. 4.3 The need to maintain stability in the Bank's Senior Management, against thebackground of the recent resignations of senior officers, and especially withregard to the privatization of the Bank. 4.4 The fact that the Bank has no option program for Senior Management. Itshould be noted that the Bank has an option program for all its employees,including Senior Management, but no Senior Management option program exists, asis the norm at other banks and other large financial institutions. 4.5 Further, the determination of the compensation level for senior officers ofthe Bank is carried out against the background of accepted compensation levelsfor senior officers in corresponding positions in the banking system and otherlarge financial institutions. 4.6 Determination of the compensation level was carried out while taking intoaccount general public considerations. The Audit Committee and Board of Directors are satisfied that the compensationapproved by them for the Chairman of the Board of Directors and the Managementin respect of 2007, is appropriate and reasonable considering the circumstancesand compared with the banking system as a whole. 5. None of the Chairman of the Board of Directors, the President and ChiefExecutive Officer, the Senior Deputy Chief Executive Officer and/or any of theother members of the Management or the Chief Internal Auditor was present at theapproval of the resolutions by the Compensation Committee, the AdministrationCommittee, the Audit Committee and the Board of Directors. --------------------------(1) According to publicly available data. Date and time at which the corporation first became aware of the event ormatter:30 March 2008 at 19:55.________________________________________________________________Name of Electronic Reporter: Jennifer Janes, Position: Executive Vice President,Group SecretaryPOB 2 Tel Aviv 61000, Phone: + 972 3 5149419, Facsimile: + 972 3 5149732,Electronic Mail: jennifer@bll.co.il This information is provided by RNS The company news service from the London Stock Exchange