Moshe Arbel's Upgrade: Annual Compensation at Mehadrin to Reach 3.4 Million Shekels

Former Interior Minister Moshe Arbel, who was appointed chairman of the Mehadrin company immediately after his retirement from political life in May, is expected to receive a salary and additional compensation for an 80% position, at an annual cost to the company of up to 3.4 million shekels. The compensation package will be brought for approval to the shareholders' meeting to be held in mid-September.

Arbel's base salary will be 100,000 shekels gross per month — a significant upgrade compared to the salary of 49,000 shekels gross to which he was entitled as a Knesset member until May, and the monthly salary of 55,000 shekels he received while serving as a minister, until he resigned from the government along with the other Shas ministers in July of last year. In addition to the base salary, Arbel will be entitled to an annual bonus of up to 900,000 shekels — equivalent to nine monthly salaries — subject to the company meeting the targets set by the board of directors.

Alongside this, he will also receive an option package with a total value of 3 million shekels. This involves 45,000 options that can be exercised in 12 equal quarterly installments over four years, starting this coming October. The exercise price was set on a tiered basis: the first four installments will be exercisable at a price of 299.4 shekels per share, while the last four installments at a price of 315 shekels per share. This is compared to a share price of 286.4 shekels at the end of the trading day preceding the decision to allocate the options. Since the exercise prices are higher than the current share price, the options are allocated "out of the money," so Arbel will only be able to profit from them if the company's share rises above the exercise prices.

Arbel's maximum annual compensation cost may reach 3.4 million shekels if he receives the full annual bonus. Of this amount, about 1.7 million shekels are attributed to the salary cost, 900,000 shekels to the annual bonus, and about 750,000 shekels to the cost of equity compensation. If he ends his tenure during his first year of service, Arbel will be entitled to an adjustment grant of 300,000 shekels. If his tenure ends at a later date, the adjustment grant will increase to 600,000 shekels.

Arbel (42) served as a Knesset member on behalf of Shas since 2019, and in the last government served as Interior Minister, after previously serving as Health Minister. In the resignation letter he submitted to the Knesset Speaker in May, he wrote that he decided to retire "out of a desire to dedicate time to my family, to Torah study, and to my academic studies." Shortly thereafter, he was appointed chairman of Mehadrin.

Mehadrin, which is controlled by Delek Group — which holds 61.4% of the company's shares through it — is mainly engaged in agricultural activity, including planting, processing, packaging, and marketing of orchards, mainly avocados, dates, and citrus fruits. Alongside this, it also operates in the field of cold storage services and water supply for farmers. Delek Group acquired control of Mehadrin in July 2023 at a company valuation of 560 million shekels. Today, Mehadrin is traded on the Tel Aviv Stock Exchange at a valuation of 961 million shekels. In fact, through the deal, Delek re-acquired control of the company after parting with it as part of an aggressive asset realization it carried out during the COVID-19 crisis. Since Mehadrin's return to the control of Yitzhak Tshuva, the company has been working to expand its real estate activity. In September 2023, Dalit Zilber, former CEO of the Planning Administration, was appointed Deputy CEO for Planning, Construction, and Real Estate Development, and last November, Mehadrin acquired control of a company operating in the field of urban renewal.