Monday explains to employees: "There is no connection between the CEO salary upgrade and the layoffs"

Ahead of the approval of the salary upgrade for co-CEOs Roey Mann and Eran Zinman this evening at a special investors' meeting, Monday is publishing an explanation of the move to its employees in Israel following public criticism regarding the proximity between the request for a raise and the layoff of 620 of the company's employees about two weeks ago.

"While some of the coverage links this update to the recent changes in the company, the organizational change we carried out was intended to adapt the company's structure to our new product and business focus. These are completely separate processes, with schedules that are not dependent on each other. This process began about half a year ago, long before we decided on the organizational change."

Mann and Zinman are asking the investors' meeting to approve this evening at 6:00 PM the increase of the compensation package for each of them gradually from $7.3 million today to $14.6 million by 2029. According to the request published on the New York Stock Exchange, the base salary will increase gradually from 93,000 shekels per month to 120,000 shekels per month, and the value and cap of the equity compensation will rise to $13.65 million in 2029.

Competitive and market-adjusted compensation policy

At Monday, they explain that since the IPO five years ago, their compensation package has remained fixed, even though the company's revenues have grown from about $300 million to more than $1 billion per year. The CEOs originally imposed on themselves a salary increase cap of 3% per year and fixed stock and option grants of about $7 million per year regardless of performance — which it defines as an exceptional move in the market. The company further claims that the salary of Mann and Zinman is at the 25th percentile of the salary customary in the market and that they wish to raise it to the 50th percentile.

"This is the first time we are updating at Monday the salary compensation policy of Roey and Eran since the IPO on NASDAQ about five years ago," wrote the company's management. "The previous policy came to an end this year and there is an obligation to renew it by approval of the shareholders at the meeting that takes place once a year — every August. The goal of the update is to maintain a competitive, consistent, and market-adjusted compensation policy, as we have been doing over the years at all levels of the organization."

The CEOs' salary undergoes a similar process and is determined by a compensation committee and board of directors according to an objective review process from which it emerged that, according to an external benchmark, their salary had been below what is customary and practiced in the market for several years, and the proposed program balances it gradually over the next two years. Most of the compensation package is not current salary but equity-based compensation of Monday, the value of which depends on the company's performance over time. In addition, the numbers that appear in the policy are maximum caps and not guaranteed amounts. The actual compensation depends on performance, meeting goals, and board of directors' decisions. Most of the compensation depends on the company's success.