Philippe Donnet during the presentation of Generali’s strategic plan in Milan, November 21, 2018 (AFP / Miguel MEDINA)
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 spoke clearly and unambiguously for the list presented by the outgoing board of directors,” commented Mr. Donnet, a 61-year-old French polytechnician.
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.
Despite the failure, Mr. Caltagirone remained combative: “as long as I consider it reasonable, I will continue to work for the change to take place”, he warned in a press release, believing that “Generali can do better”.
According to him, the Italian shareholders who voted for his list “want Generali to remain a company rooted in Italy and linked to Italy”.
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.
The choice of institutional shareholders, ie 35% of the capital, proved to be decisive for this unprecedented battle. The two main shareholder advisory firms ISS and Glass Lewis had recommended that they vote for the list of Mr. Donnet, deemed more credible.
– Call for unity –
Facing Mr. Donnet is Luciano Cirina, 56, former head of the Eastern Europe region of Generali, who had unsuccessfully sought the post of CEO. The band fired him soon after his candidacy was announced.
MM. Caltagirone (9.95%) and Del Vecchio (9.82%) received support from the CRT foundation (1.7%), Cassa Forense (1.1%) and the Benetton family (4.75%) , which rallied to them, preferring the candidates of the “entrepreneurial shareholders”.
“We will now work together with determination to preserve the interests of all shareholders,” promised Mr. Donnet, thus launching an appeal for unity.
Within the future board of directors, which could meet on Monday, he will have to live with the three elected representatives of the opposing camp, including Mr. Caltagirone, who had left him with a bang in January to prepare his own list. The ten other members come from Mr. Donnet’s list.
The slingers published a plan in March presented as being “more ambitious” than that of the CEO, called “Waking up the lion”, in allusion to the emblem of the insurer.
This plan expects earnings per share to rise by more than 14% per year by 2024, against 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? –
Logo of the Generali insurer in Milan. (AFP/Miguel MEDINA)
The dissidents argue that Generali has lost ground to Allianz, Axa or Zurich Insurance, with a capitalization that has shrunk by 8.2 billion euros over the past 15 years.
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, important transformations have been made,” Giuliano Noci, professor of strategy at the Polytechnic of Milan, told AFP.
But MM. Caltagirone and Del Vecchio have probably not said their last word.
They could thus increase the pressure on Mediobanca, their main adversary in the struggle for control of Generali, whom 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%.