Generali CEO Donnet survives but rebels take board seats

[April 29, 2022]  By Gianluca Semeraro and Valentina Za

MILAN (Reuters) -Philippe Donnet kept his job as chief executive of Italian insurer Generali on Friday, surviving a challenge from a group of rebel domestic investors thanks to strong support from institutional shareholders.

The vote at the company's annual general meeting (AGM) ends months of bitter infighting at the heart of Europe's third-largest insurer but leaves a question mark over whether the main challengers will hang on to their combined 20% stake.

The company's board nominees, backed by leading shareholder Mediobanca, gained the support of 56% of shareholders who voted at the AGM, against 42% for a rival slate nominated by investor Francesco Gaetano Caltagirone.

However, Caltagirone's share of the vote was enough to ensure his list would be allocated three seats on the 13-strong Generali board, potentially making life uncomfortable for Donnet, who has been in charge since 2016.

Caltagirone, a construction and media entrepreneur, will be in line to take one of the places because his was the first name on the slate put forward by his group.

He had quit the board in January and his camp has been pushing for Generali to set more ambitious growth targets and to step up its deal-making activity.

Speaking after the vote, which was held remotely because of COVID-19 protocols, Donnet made a call for unity.

"The unambiguous choice of a majority of shareholders is proof of the confidence they have in our management team and strategic plan," he said.

"Now we'll all work together in one direction with the board, management and our network of agents ... to pursue the interest of all stakeholders and the success of our group."

The Generali logo is seen on the company's Tower, designed by Iraqi-British architect Zaha Hadidat, at the Milan's CityLife district, Italy November 5, 2018. REUTERS/Stefano Rellandini

Caltagirone and fellow billionaire investor Leonardo Del Vecchio had opposed the list of executives proposed by the Generali board.

Caltagirone had nominated former Generali executive Luciano Cirina as a replacement for Donnet and former Goldman Sachs banker Claudio Costamagna as chairman alongside Cirina.

Cirina and Costamagna had dubbed their programme "Awakening the Lion", a reference to Generali's nickname "The Lion of Trieste".

They wanted to spend as much as 7 billion euros ($7.4 billion) on M&A, compared with the existing board's plan for 3 billion euros, and have also targeted annual earnings growth of more than 14% with heavy cost cuts and acquisitions.

Roberto Lottici, a fund manager at Banca Ifigest in Milan, said it is now imperative that the rival parties establish a dialogue.

"The challenge will be to combine Generali's trademark 'safety and solidity' with the bolder attitude promoted by Caltagirone," Lottici said.

"Let's not forget the challengers have invested a lot in Generali and they certainly don't want to hamper the company's progress."

($1 = 0.9462 euros)

(Reporting by Gianluca Semeraro and Valentina ZaEditing by Keith Weir and David Goodman)

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