Exec Bonuses at Ailing “Mega” Chain Fuel Working-Class Fury

Executives of the “Mega” supermarket chain, to which a Lod court assigned a trustee this week after it tottered on the brink of collapse, have elicited harsh rebukes in recent days for taking hefty bonuses. Mega owed NIS 477 million ($120.9 million) to suppliers, another NIS 494 million to banks, NIS 257 million to its parent company, and NIS 62 million to employees.

Hadash Histadrut fraction leaders, Majid Abu-Younes and Suhail Diab at the Mega workers’ demonstration, last Sunday, in Tel-Aviv

Hadash Histadrut fraction leaders, Majid Abu-Younes and Suhail Diab at the Mega workers’ demonstration, last Sunday, in Tel-Aviv (Photo: Hadash Histadrut Fraction)

Once the top rival to Supersol, Mega is now down to 127 stores, many of them Mega in the City outlets located in residential areas and some of its Zol B’Shefa chain geared to the ultra-Orthodox market. Unions, as well as many of Mega’s suppliers and potential buyers of the business, are demanding that Alon Blue Square’s controlling shareholders inject capital in the Mega chain to keep it afloat.

Mega’s workers’ committee, which received a 33% stake in the chain as part of the July agreement, demanded that both owners and the kibbutz purchasing organization that control Alon Blue Square put in NIS 60 million to stabilize operations. “Even if a receiver is appointed by the court, he will need to operate the company and purchase inventory. We need the backing of the owners,” said Eyal Eli, chairman of the Mega workers’ committee.

In court proceedings which took place on Monday, January 18, it emerged that Avigdor Kaplan, chairman of Mega’s parent company Alon Blue Square Israel, is due to receive a NIS 560,000 bonus and that former Alon Blue Square chairman David Wiessman sought NIS 1.3 million. On Tuesday, it became clear that Mega CEO Raviv Brookmayer, who has tried to steer the sinking ship during his six-month tenure, will receive a bonus of NIS 2 million. Meanwhile, the fates of their remaining 3,500 workers remain in question, and suppliers have gone unpaid despite the company having cash on hand.

Joint List MK Dov Khenin (Hadash) proposed a bill to make owners more accountable by linking them financially to their companies. “It’s inconceivable that we’ll continue seeing owners emptying out the bank accounts of their business through inflated bonuses, and then when the business collapses because of their greedy management, they are protected and secure while the workers face an economic abyss,” he said. The store’s 3,500 workers weren’t even sure if they’d be getting their paycheck for the month, he added. According to Khenin: “‘Mega failure’ is a typical move from Israeli capitalists.”

Hadash Histadrut fraction leaders, Suhail Diab and Majid Abu-Younes called for the chain’s owners – Shraga Biran, David Wiessman and the kibbutzim – to be prosecuted. “They took out NIS 1.3 billion worth of dividends from Mega and its parent company. The capitalists former owners seemingly emptied it out, simply emptied it in a scandalous way. They took all the real estate and transferred it to the parent company. They leased the real estate to Mega at outrageous rents that weren’t the market price without leaving it any of the fat and no money,” they said.