AFP, published on Friday, April 29, 2022 at 12:27 p.m.
After a fierce battle, the verdict has fallen: the shareholders of the Italian insurer Generali voted on Friday for the renewal of CEO Philippe Donnet, thus inflicting a defeat on the two rebellious billionaires who opposed it.
In total, 55.9% of the capital represented at the general meeting voted for the list of the outgoing board of directors, while 41.7% opted for that of the opposing camp, led by the magnate of the building Francesco Gaetano Caltagirone.
“The majority expressed itself clearly and unambiguously for the list presented by the outgoing board of directors”, commented Mr. Donnet, a 61-year-old French polytechnician, at the end of the assembly gathered by videoconference.
70.73% of Generali’s capital was represented, a record participation rate. Reported to the whole of the capital, Mr. Donnet, who thus begins a third term, was able to secure the support of 39%, while the camp of the slingers gathered 29%.
Mr. Donnet was able to count on the votes of Mediobanca, the main shareholder with 12.8% of the capital but 17.2% of the voting rights, the De Agostini holding company (1.44%) and a series of investment funds, especially foreigners, 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 shareholder advisory companies ISS and Glass Lewis, very listened to by foreign investors, had indeed recommended to vote for the list of Mr. Donnet, more credible according to them.
The sling against the renewal of the CEO had been led by two great figures of Italian capitalism, Mr. Caltagirone, 79, and Leonardo Del Vecchio, 86, founder of the manufacturer of glasses Luxottica and second fortune of Italy.
– Call for unity –
MM. Caltagirone (9.95%) and Del Vecchio (8%) had received the support of the CRT foundation (1.7%) and also of the Benetton family (4%), which rallied to them, preferring the candidates from “entrepreneurs” to the “self-proclaimed list” of outgoing directors.
Facing Mr. Donnet is Luciano Cirina, 56, former head of Austria and the Eastern Europe region of Generali, who had unsuccessfully sought the post of CEO. The group, which sees it as a “treason”, dismissed him shortly after the announcement of his candidacy.
“We will now work together with determination to preserve the interests of all shareholders,” promised Mr. Donnet, thus launching an appeal for unity.
A third list, presented by Assogestioni, which brings together Italian institutional investors, won only 1.9% of the vote.
The slingers published in March a strategic plan presented as being “more ambitious” than that of Mr. Donnet, called “Waking up the lion”, in allusion to the emblem of the insurer.
This plan assumes an increase in earnings per share of more than 14% per year by 2024, against a target of 6 to 8% forecast by Mr. Donnet, and is more generous in terms of mergers and acquisitions, with a war chest of 7 billion euros.
– Wake the lion? –
The dissidents argue that Generali has lost ground to Allianz, Axa or Zurich Insurance, with a capitalization that has decreased by 8.2 billion euros over the past 15 years, where its competitors have increased theirs.
Donnet’s supporters counter that since he joined in November 2016, the stock’s price has risen 55%, well above the industry average, and shareholder returns have increased 106%. And in 2021, for the third year in a row, the insurer posted record results.
Should Generali be woken up? “The lion has already woken up in recent years, significant transformations have been made,” said Giuliano Noci, professor of strategy at the Polytechnic of Milan, deeming “positive” the balance sheet of Mr. Give.
But MM. Caltagirone and Del Vecchio, who will have three seats on the future board of directors, have probably not said their last word.
They could also increase the pressure on Mediobanca, their main opponent in the fight for control of Generali, which they accuse of acting behind the scenes to impose the leaders of its choice.
The accusations against Mediobanca are all the more explosive as Mr. Del Vecchio is the main shareholder, with a 19.4% share, and Mr. Caltagirone holds 3.1%.