In a bid to narrow the pay gap between employees and bosses, the government of Israel has adopted a new law to cap salaries of bank executives.
The new law, which is expected to be effective in six months, will cap total compensation of bankers at ILS2.5m ($663658.2) annually, or no higher than 44 times the salary of the least-paid employee at the company.
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The law also mandates that anything above this cap will be subject to higher taxes.
The law, which has already been approved in the parliament, will be applicable to both banks as well as insurance companies.
Commenting on the new law, Israel finance minister Moshe Kahlon said: "There is a moral significance beyond the economic significance in this law. It symbolises narrowing pay gaps, solidarity and consideration for the weak."
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