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Ex-Bank Leumi execs to repay part of bonuses after U.S. tax probe

October 13, 2015

By Tova Cohen

Three former senior executives at Bank Leumi will return part of the bonuses they received after Israel’s second largest bank agreed a $400 million settlement with U.S. tax authorities, the company said on Monday. Leumi agreed to make the payment last December to settle two separate investigations into whether it helped American clients, largely in its Swiss unit, evade taxes.

An independent committee set up to examine the conduct of the bank’s board and senior management recommended the three executives return 11 percent of the bonuses they received for the 2002-2010 period, a total of 5.1 million shekels ($1.3 million).

The $400 million payment by Leumi represented 11 percent of its total profits in those years, the committee said. That is why it asked the former executives to repay a similar portion of their bonuses.

In addition, the committee recommended that the bank recoup $92 million from insurance policies covering board actions.

Leumi said its board has decided to accept all of the committee’s recommendations and have submitted them to Tel Aviv District Court for approval. The three people are former chief executive Galia Maor, former chairman Eitan Raff and the former head of its international private banking division Zvi Itskovich. Maor will pay back the largest amount — 2.6 million shekels.

The three former executives have informed the committee they agree to repay the amount requested in order to bring the matter to a close.

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