ASSICURAZIONI GENERA

G
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Generali Leadership Drama Nears AGM Finale

04/28/2022 | 10:23am

By Ed Frankl

Shareholders of Assicurazioni Generali SpA will on Friday decide the future management of the company, as a leadership battle at the top of Italy's largest insurer comes to a head.

Chief Executive Philippe Donnet, who has led the Trieste-based company since 2016, is seeking re-election but is being challenged by some leading shareholders, who have drawn up their own slate for the management board.

Investors will vote on the new board at the company's annual general meeting on Friday.

The rival slate, put together by Generali's second-largest shareholder Francesco Gaetano Caltagirone, includes former Goldman Sachs banker Claudio Costamagna as chairman and Luciano Cirina as its CEO candidate.

Cirina, who was Generali's former regional head of Austria & Central Eastern Europe, was fired by Generali after he put his name in line to replace his boss.

Mr. Caltagirone controls 9.5% of Generali and is joined in challenging the current leadership by Leonardo del Vecchio, the chairman of eyewear heavyweight EssilorLuxottica SpA, who owns 6.6%. According a report by Reuters, the rival board is also being backed by the holding company of the Benetton family, Edizione SpA, which owns 4.0% of shares.

Together, the challengers claim that Generali has gradually lost ground to peers such as Allianz SE, AXA SA and Zurich Insurance Group AG. They want to deliver faster earnings growth of 14% by 2024, sharper cost-cutting and to spend as much as EUR7 billion on acquisitions.

Generali says that since Mr. Donnet's first investor day in 2016 its performance compared with peers' has beaten rivals in terms of shareholder return and share price.

At a strategy day in December, Mr. Donnet proposed plans for EPS growth of 6%-8% and up to EUR3 billion in M&A.

The current CEO has the backing of the insurer's largest shareholder, Mediobanca SpA, which has 17.2% in voting rights, and likely a number of institutional investors.

Some analysts expressed skepticism over the rival board proposals at the time of their announcement in late March.

The plans were more aggressive but "poorly supported," also with a tight delivery schedule, Citi analysts said in a research note.

The rivals' 14% EPS growth wouldn't just beat the existing Generali plan, but the entire sector, BNP Paribas Exane analysts said. "If you offer this to investors, you need to be prepared to back it up. We don't feel we got that," they said at the time.

A higher-than-average turnout is expected at the AGM as the company soaks in increased investor focus, with 71% worth of Generali's capital voting, according to Italian daily La Repubblica.


Write to Ed Frankl at edward.frankl@dowjones.com


(END) Dow Jones Newswires

04-28-22 1223ET

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