Israeli tech employees hold stock options worth NIS 150b

“There is no doubt that high-tech employees earn huge sums – especially from the equity compensation they receive (in options and stocks). These are sums that almost no employee at any other company can earn, certainly not from a regular salary,” claims a source familiar with employee remuneration.

He adds, “We must remember that even in high-tech, salaries are high relative to wages in the economy, but the great wealth is from equity. Whether it is an employee at a public company whose equity remuneration can be worth millions of dollars, or an employee at a private company that makes an exit and suddenly receives a large sum.” This situation, according to the same source, “definitely creates class divisions in the economy, and also foreigners have invested a lot of money in the real estate market.”

High employment rate in Israeli tech

The enormous wealth concentrated in the hands of tech employees in Israel raises a number of fundamental issues that go beyond the boundaries of the industry. Data from the Central Bureau of Statistics published a few months ago show that the high employment rate in tech in Israel – 11% of employees in the economy, compared with 9% about a decade ago – is exceptional among OECD countries. The Central Bureau of Statistics 2025 report found the wage gap between the tech sector and the rest of the economy has widened, and is one of the highest among OECD countries.

The report also noted that the tech sector is responsible for about 18% of GDP, about 60% of exports, and about 33% of GDP growth in Israel since 2017, and that income tax payments from the tech sector are about 24% of all direct tax payments in Israel.

Alongside this, a publication by tech job placement company Ethosia shows that in 2025 there was a decrease in the number of tech workers in Israel for the first time in a decade, from 417,000 at the end of 2024 to 409,000 at the end of 2025. The decrease is related to the tech industry crisis in 2022-2023, after the increase in interest rates, which led to waves of layoffs and a halt in hiring, and possibly also the introduction of AI tools that make some employees redundant.

Increases the wealth effect and supports private consumption

Among the Israeli companies traded on Wall Street, the vast majority are from tech sectors – cybersecurity, software, chips, etc. At tech companies, employees often also benefit from equity compensation as part of their overall remuneration package (such as options and blocked shares). According to data from Modi Shafrir, Bank Hapoalim chief strategist, at the end of 2025 Israeli employees held “in-the-money” options and blocked shares worth nearly NIS 150 billion. Even if the amount has changed since then and its shekel value has certainly decreased (due to the weakening of the dollar), it is still a huge amount.

What does such an amount mean for the Israeli economy as a whole? Shafrir says, “There are several things. First, it increases the wealth effect and therefore supports private consumption (purchase of cars, travel abroad, restaurants, etc.) and economic growth. I assume that when employees exercise the options, and this is a gradual exercise, some of the money also flows into the local stock market because of the excess return in the market. It also increases tax revenue at the time of exercise. We saw an extreme case in the sale of Wiz, but options held by Israeli employees in publicly traded tech companies are also significant.”

According to Shafrir, this is also “One of the factors, not necessarily the main one, supporting a strong shekel as most employees will want to convert the dollar exercised proceeds into shekels, because they live here in Israel.” There is also an impact on the local real estate market, although according to Shafrir, “This is something that is expected to support it in the future, because now there is excess supply, predominantly in the center. In 2021-2022, mainly after Covid, these exercises supported real estate prices in Tel Aviv, but today the market is more affected by other things.”

You mentioned the support for a strong shekel, the weakness of the dollar is affected by the exercise of share options, but it is likely that it also affects them?

Shafrir: “There is no doubt that when the shekel strengthens, it affects the value of the options, which are denominated in dollars. Therefore, it is also possible that those who exercise options will choose to buy dollar-denominated assets such as US stocks.”

To what extent does the issue affect inflation?

“On the one hand, there is an effect on inflation, because private consumption is inflationary. On the other hand, assuming that some of this affects the exchange rate, then there is also a disinflationary effect. Overall, the inflationary effect is higher, but not very substantial.”

Are two economic classes actually being created here – tech employees and everyone else?

“By and large, this increases inequality on the one hand. On the other hand, the tech sector is very important to the country in many aspects, including tax payments, support for growth, and more.”

The big question: How much will be exercised?

Meitav chief economist Alex Zabezhinsky believes that one of the missing pieces of data to determine the impact of the options that are currently “in the money” on the Israeli economy lies in the question of what amount employees are going to exercise – in essence convert it into money.

He says, “By and large, the public’s asset portfolio stands at about NIS 7 trillion, and grew by about NIS 1 trillion in 2025,” So, according to him, an amount of over NIS 100 billion in options is “quite a bit, but it’s still a small percentage of the asset portfolio and about 10% of its growth. Obviously, an addition of 10% is significant, but here large sums are concentrated in relatively few hands, and the question is how much of it will be spent on consumption – in my opinion, relatively little.”

Zabezhinsky believes that since these are relatively wealthy people, with a low marginal propensity to consume, any additional shekel for those tech employees will not lead to the same level of consumption as for other people at a lower socioeconomic level. “In my estimation, most of the amount that is exercised goes to savings and investments,” he says. “The impact could be mainly on the real estate market, if a young tech employees exercises options and buys a property for themselves or for investment purposes; another impact could be on large durable goods, such as cars. Less on current consumption such as food and other services.”

What would be the impact on the exchange rate?

“If the employees receive the money in dollars and part of it is converted into shekels, and I estimate that the tendency is to convert at least some of it – it will have an impact. I don’t think it’s anything substantial right now. It has an impact, but it’s not a game changer, but it adds more pressure to the strengthening of the shekel.”

Regarding the impact on inflation, Zabezhinsky believes it is marginal. “It’s not that such sales are making a turnaround in the real estate market. Yes, more expensive properties are being bought, it may affect prices in Tel Aviv, but it’s not a macroeconomic event of a lot of buyers rushing in. If the entire amount had gone to consumption, then there would have been an impact on inflation. But it doesn’t, so it’s likely that most of the money is being directed to savings and investments, and only some of it flows into the economy and has an impact.”

Published by Globes, Israel business news – en.globes.co.il – on April 26, 2026.

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