Shareholders of Italian insurance giant Generali were preparing Friday to oust their CEO amid a climate of revolt against executives and as France moves to clamp down on top brass salaries.
Frustrated by the company’s poor performance on the stock market, “a large majority of shareholders” want to give Generali “a new start” by getting rid of Giovanni Perissinotto, a source close to the matter told AFP on Friday.
Perissinotto’s fate will be decided at a board meeting set for Saturday at 0830 GMT in Milan. Several sources have said he is likely to be replaced by Mario Greco, executive committee member of the Zurich Insurance Group. But Perissinotto, who has headed up the Trieste-based Generali since 2001, is refusing to fall victim to a shareholder uprising.
When investment bank Mediobanca — which is the insurance giant’s largest shareholder with a 13.24 per cent share — summoned Perissinotto on Wednesday, he refused to resign, forcing shareholders to put the matter to a vote.
In a letter published Friday in the national media, he expressed his “incredulity” and accused Mediobanca of “putting its own interests once more ahead of those of the company.”
The public battle has thrown Generali into turmoil, just a year after chairman Cesare Geronzi was ousted for “improper governance.”
Mediobanca is not the only company baying for Perissinotto’s exit. Leonardo Del Vecchio, which holds 3.0 per cent of Generali, De Agostini publishers with 2.43 per cent and Caltagirone constructors with 2.27 per cent all want him out.
The coup “is the result of unease felt among shareholders for several months regarding the company’s progress in the stock market and the management of the group, which has not been getting satisfactory results,” another source said.
The company posted a 50-percent drop in net profit in 2011 and lost another 7.9 per cent in the first quarter of 2012, and the company was forced to reduce the dividend in 2011 to 0.20 euros per share, down from 0.45 euros in 2010.
The revolt was started by Leonardo Del Vecchio in April when it called in the Corriere della Sera daily for Perissinotto to “resign with dignity.”
The director general’s probable departure saw Generali’s shares shoot up 4.93 per cent on Milan’s FTSE Mib stock exchange in Friday morning trading. The shareholder uprising comes as new figures show Italian unemployment reached a new high in April and patience with high-earning executives wanes.
In a Europe weighed down by an intense financial crisis, France’s new socialist government took the latest stand against what is seen as excessive executive pay, vowing to bring in new measures by mid-June to cap salaries.
The proposal, to cap salaries at no more than 20 times the pay of a company’s lowest-paid worker, is likely to be very popular with those sick of seeing CEO’s ousted for poor performance but rewarded with golden parachutes.
Milan, June 1, 2012 (AFP)