MILAN – Investors signalled concern Tuesday at a change of leadership at the scandal-plagued Finmeccanica defence contractor as part of sweeping management changes announced by Italian Premier Matteo Renzi at four strategic state-backed firms.
Renzi swept aside current executives at oil giant Eni, the Enel power company, the Italian postal service and Finmeccanica, in a bid for renewal. He also placed more women on the company boards, raising the quotient to almost one-third, although none was placed in charge of operations as CEO.
The nominations must be confirmed by the respective boards, which meet next month. The mostly closely watched changes were at Eni and Finmeccanica, firms with significant international contracts.
Mauro Moretti, head of the Italian railway, was named to succeed Alessandro Pansa, who took over the scandal-plagued Finmeccanica a year ago following the ouster of two predecessors and has been favourably viewed by investors. Shares in Finmeccanica dropped 2.9 per centper cent to 6.505 euros ($9.56).
Finmeccanica, a global player in defence and aeronautics that is 30-per cent state owned, has been tainted by a series of corruption investigations, including a trial on bribery charges against a former CEO and the former head of its AgustaWestland subsidiary involving the sale of helicopters to India.
Investor concerns, however, were more operational. Analysts at Mediobanca said in a note that the change of CEO could lead to “radical rethinking” of plans to sell nonmilitary assets and could bring write-downs of assets in a move to clean up the balance sheet.
The government chose insiders at Eni and Enel for the top jobs, receiving a generally positive market reception. Shares in Eni rose 0.5 per cent while Enel dropped 0.5 per cent, in a market that was down 0.8 per cent.
Claudio Descalzi, currently Eni head of exploration and production, replaces Paolo Scaroni, who is at the end of three three-year terms. Equita analysts said Descalzi should assure continuity at Eni.
Francesco Starace is promoted to Enel CEO from his role at Enel Green Power, a renewable energy subsidiary — a move welcomed by Greenpeace, which opposed the outgoing CEO’s plans to expand reliance on nuclear power, purchased from abroad.
While Renzi sought to shake up the status quo, commentators at Corriere della Sera note that the nominations in fact show “the poverty of our managerial class” by recycling many familiar figures.
Renzi’s nominations of women to boards exceeded a legal requirement of 20 per cent, and he named three as chairwomen, including the former head of the Confindustria industrial lobby, Emma Marcegaglia, at Eni; and Patrizia Grieco, currently with Olivetti, at Enel.
Still, the fact that no woman was named CEO was “a disappointment,” Corriere wrote, especially given the fact that chairmen under Italian company statute often have a “representative” and not substantial role in running the company.
Renzi also proposed putting a ceiling on the chairmen’s salaries of 238,000 euros ($329,000), in line with that of Italy’s president.
The announcements did not address the contentious issue of CEO salaries, given that the state enterprises are often in competition with private firms with highly compensated executives. Moretti, in particular, has protested calls to put a ceiling on CEO salaries, noting that his counterpart at the German Railway earns more than 2 1/2 times his annual salary of 850,000 euros.