Rebel investors step down and prepare to battle re-election of Generali board

The rift between Italian insurance giant Generali and two of its biggest investors that are unhappy with the new strategic plan revealed in mid-December has deepened, as director Romolo Bardin announced his resignation from the board. Bardin is the board representative of eyewear billionaire Leonardo Del Vecchio, who is the third-largest sharehdolder in the group with close to 7%. This followed the news late last week of the resignation of director Francesco Gaetano Caltagirone, a billionaire construction and real estate magnate, who holds just over 8% of the group’s shares. It is thought that Caltagirone and Del Vecchio, who hold almost 16% of Generali’s shares combined with the backing of a third smaller investor, intend to persuade institutional shareholders to reject the reappointment of CEO Philippe Donnet. Donnet and his other board members, including chairman Gabriele Galateri di Genola, have the support of the group’s biggest shareholder Mediobanca, which recently borrowed shares to complement its 12.8% holding and bring its voting shares up to 17%. News agency Reuters said the bank did so to help defend the board at the upcoming April meeting at which a new board will be elected or re-elected. In their resignation letters, both Caltagirone and Bardin accused the Generali board of improper conduct and failing to consult properly over the new strategic plan. The Generali board “categorically rejected” Caltagirone’s statement and said the company had always acted with “absolute transparency and rigorous fairness, in the interest of all stakeholders”, in response to Bardin’s letter. Generali said today that Bardin referred to operating procedures and some choices of the board and the committees in which he participates, in particular the process for the formation of the board list, as reasons for his decision to step down. Chairman di Genola said: “I deeply regret the decision taken by Mr Bardin. I wish to reiterate, once again, that the company has always conducted its business according to the standards of absolute transparency and rigorous fairness, in the interest of all stakeholders. These principles, I underline, have always been adhered to in our relations with all directors, without exception and at all times.” In his letter to di Genola, Caltagirone said he was “prevented from making his own critical contribution and from ensuring adequate control”, referring to the working methods of the board of directors. Specifically, he said there were serious shortcomings in the presentation and approval of the strategic plan, the procedure for the presentation of a list by the board, the approach to the application of the legislation on privileged information, and the approach towards media relations and large shareholders, even if the holders of equity investments are below the thresholds of relevance. Chairman di Genola again refuted the claims as he said: “I express deep regret and surprise for the decision taken by Mr Caltagirone. The reasons given can only be categorically rejected as the company has always conducted its business according to criteria of absolute transparency and rigorous fairness, also in relation to the work for the presentation of a list for the renewal of the board, of which it has continuously informed the supervisory authorities. The aforementioned principles were adhered to in relations with all the directors, without exception and on every occasion.” Generali's board is due to meet on Tuesday to start examining the initial list of candidates for the board.

Rebel investors step down and prepare to battle re-election of Generali board

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