Generali rival leadership bid fails; CEO Philippe Donnet prevails

Italian insurer  Generali’s CEO Philippe Donnet (pictured) secured a consecutive term as shareholders rejected a rebel group’s bid for power and stood behind the leadership line-up recommended by the outgoing board.

Philippe Donnet secured a consecutive term in office as shareholders rejected a rebel group's bid for power and stood behind the leadership line-up recommended by the outgoing board.

Donnet and the rest of the board-approved panel secured just under 56% of the vote, ahead of nearly 42% of votes taken by the rebel shareholder group led by Italian billionaire Francesco Caltagirone. Nearly 71% of shareholder votes were present at the joint AGM/EGM, a notable increase on prior meetings.

Caltagirone had sought to wrest the insurer from the grip of Mediobanca, a battle already visible in a fractured j2021 AGM. Caltagirone had brought on fellow Italian magnate Leonardo Del Vecchio and launched a proxy bid for support.

Amongst those leading shareholders, voting power was fairly easily matched, with upper teen percentages on both sides. Mediobanca had bolstered its position on borrowed shares, a move contested by the rebel group.

The Caltagirone-led group had accused current management of non-transparent relations with Mediobanca and an under-achieving strategy. They vowed to beat the current team on growth and profits via both strong M&A and notable cost cutting while still lining investor pockets.

In his comments to shareholders at the outset of Friday’s joint meeting, Donnet had urged a vote to “further guarantee continuity and momentum” with a vow that a vote for the board-recommended slate offers “a significant increase in profit and further improvement in the quality of profit and an increasing dividend year by year.”

Aware of the leadership struggle, Donnet and team had cuddled up to shareholders late in 2021 with the first dividend offer in ages and a new strategy document vowing further gains in profits and shareholder remuneration.

The 42% secured by the Caltagirone group exceeded the momentum visible in headlines and commentary leading up to the vote. Most brokerage research had forecast, and even recommended, a victory for incumbent management. Proxy servicing consultancies had agreed. The handful of pre-emptive announcements by financial shareholders had gone with the board-approved slate.

For the brokerage analysts, the rival proposal seemed to offer a good chance to press current management for a bit more in shareholder remuneration, but not necessarily right opportunity to place a bold new bet on a more aggressive strategy heavy on M&A.

The Russian invasion of Ukraine, with its kick-on complications for the macro outlook and geopolitical risk, may have furthered the case for investor conservativism.

The Generali meetings passed the remainder of its scheduled business on considerably stronger majorities, with board-recommended resolutions never seeing more than 14-17% opposition.

While Donnet kept his job, supervisory board chair Gabriele Galateri di Genola did not. Galateri said in mid-February he would step down after eleven years at his post, citing “regret for recent tensions in the shareholder base that Generali certainly doesn't deserve.”

Also gone is Generali's head of Austria and Central and Eastern Europe (CEE), Luciano Cirinà, whom the Caltagirone group had pegged as its pick to replace Donnet. Cirinà was quickly shown the door by Donnet in late March for “violation of duty and material breach." Giovanni Liverani, CEO of Generali Deutschland, will take over Cirinà's responsibilities on an interim basis.

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