Generali shareholders decide in favor of the outgoing CEO

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published on Friday, April 29, 2022 at 12:27 p.m.

After a tough battle, the verdict fell: the shareholders of the Italian insurance Generali voted on Friday for the renewal of the CEO Philippe Donnet, thus causing the defeat of the two revolutionary billionaires who opposed.

Overall, 55.9% of the capital represented at the general meeting voted for the outgoing board list, while 41.7% chose that of the rival camp, headed by building mogul Francesco Gaetano Caltagirone.

“The majority was clear and unequivocal about the list presented by the outgoing board,” said Donnett, a 61-year-old French polytechnic, at the end of a teleconference meeting.

70.73% of Generali’s capital was represented, a record percentage of participation. Referring to the whole capital, Mr. Donnet, who is thus starting a third term, managed to secure the support of 39%, while the sling camp gathered 29%.

Mr Donnet was able to rely on the votes of Mediobanca, the main shareholder with 12.8% of the capital but 17.2% of the voting rights, the holding company De Agostini (1.44%) and a number of investment funds, especially foreign , who had lined up publicly behind him.

The choice of institutional shareholders, ie 35% of the capital, proved to be decisive for this unprecedented battle. The two main consulting firms ISS and Glass Lewis, which are heard a lot by foreign investors, had indeed proposed to vote for Mr. Donnet’s list, which they believe is more credible.

The slingshot against the CEO’s renewal had led to two major forms of Italian capitalism: 79-year-old Caltagirone and Leonardo Del Vecchio, 86, founder of the luxury glass company Luxottica and Italy’s second-largest asset.

– Call for unity –

ΜΜ. Caltagirone (9.95%) and Del Vecchio (8%) had the support of the CRT Foundation (1.7%) and the Benetton family (4%), which rallied around them, preferring candidates from ” entrepreneurs “from the” self-proclaimed list “of outgoing managers.

Mr. Donnet faces Luciano Cirina, 56, a former Austrian and Generali leader in Eastern Europe who had unsuccessfully sought the post of CEO. The team, which sees it as a “betrayal”, fired him shortly after the announcement of his candidacy.

“We will now work together resolutely to safeguard the interests of all shareholders,” Donnet promised, launching a call for unity.

A third list, presented by Assogestioni, which brings together Italian institutional investors, won only 1.9% of the vote.

The slingshots published a strategic plan in March that was presented as “more ambitious” than Mr. Donnet’s, called “Waking up the lion,” alluding to the insurance company’s emblem.

This plan envisions an increase in earnings per share of more than 14% per year by 2024, up from a 6 to 8% target set by Mr Donnet, and is more generous in terms of mergers and acquisitions, with a war budget of € 7 billion. .

– Does the lion wake up? –

Opponents say Generali has lost ground to Allianz, Axa or Zurich Insurance, with a market capitalization that has fallen by 8.2 billion over the past 15 years, where its competitors have increased theirs.

Proponents of Donnet argue that since joining in November 2016, the share price has risen by 55%, well above the industry average, and shareholder returns have risen by 106%. And in 2021, for the third consecutive year, the insurance company published record results.

Should Generali wake up? “The lion has already awakened in recent years, significant transformations have taken place,” said Giuliano Nocchi, a professor of strategy at the Polytechnic University of Milan, who called Mr Give’s balance sheet “positive”.

But MM. Caltagirone and Del Vecchio, who will have three seats on the future board, have probably not said their last word.

They could also increase pressure on Mediobanca, their main rival in the fight for control of Generali, which they accuse of acting behind the scenes to impose its chosen leaders.

The accusations against Mediobanca are even more explosive as the main shareholder is Mr. Del Vecchio, with a share of 19.4% and Mr. Caltagirone holds 3.1%.

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