The company’s controlling shareholder has not performed his duties as chairman for almost three months
As a result of the Israel Securities Authority’s investigation of the group of companies controlled by Shaul Elovitch, he has not been performing his duties as Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) chairman for almost three months. The company today reported to the Tel Aviv Stock Exchange (TASE) that in view of the restrictions imposed on Elovitch and other directors representing Bezeq controlling shareholder Eurocom Group, Bezeq’s remuneration committee and board of directors had discussed the management agreement between Bezeq and Eurocom
The Bezeq board of directors yesterday decided that Bezeq’s payment to Eurocom for the services of the active chairman of Bezeq and its subsidiaries and sub-subsidiaries in respect of the period starting on June 20, 2017 would be 50% of the sum stipulated in the agreement, pending a material change in the current restrictions on Elovitch. The decision is valid until the end of 2017
Through Eurocom, Elovitch receives NIS 3.5 million in annual management fees for the services of an active chairman in Bezeq and its subsidiaries: Pelephone Communications Ltd., Bezeq International Ltd., Bezeq Online, Walla!, and DBS Satellite Services (1998) Ltd. (YES)
Eurocom also receives NIS 2.5 million in annual management fees from Bezeq for services from directors (including Amikam Shorer, Or Elovitch, and Orna Elovitch-Peled, who were interrogated in the Securities Authority investigation), and NIS 432,000 for a minimum of 60 monthly hours of consultation services. Bezeq paid Eurocom a total of NIS 6.4 million in 2016
“This decision results from the information communicated to the board of directors that on the one hand, even during the period of the restrictions, Mr. Elovitch is spending a great deal of time in dealing with the group’s affairs, while on the other hand, the board of directors realizes that due to the restrictions, Mr. Elovitch is not performing, and cannot completely perform, all the duties of an active chairman, as stipulated in the management agreement,” the company’s report stated
The board of directors believes that 50% is a proportion corresponding “to the performance of his job during the relevant period.”
Since Eurocom was already paid an advance for its serving directors in early 2017, and this amount exceeds the amount calculated on the basis of the actual participation figures to date, the Bezeq board of directors decided that at this stage, the reduced payment for the chairman’s services and consultation services would be postponed, and a final calculation and offsetting of amounts would be conducted at the end of 2017. Bezeq will either pay Eurocom or be reimbursed by it at that time, depending on the results of the calculation