Generali Board Challengers Pledge Higher Growth in Rival Plan
March 25 2022 - 7:44AM
Dow Jones News
By Ed Frankl
The rivals to Generali SpA's current board promised higher
growth and more cash for mergers and acquisitions through broad
cost-cutting as they presented an alternative strategic plan for
Italy's largest insurer.
The list of challengers, drawn up by leading shareholder
Francesco Gaetano Caltagirone, includes former Goldman Sachs banker
and current chairman of Italian insurer Revo SpA Claudio Costamagna
as chairman and the head of Generali's Austria & Central and
Eastern Europe unit Luciano Cirina.
In a statement ahead of the presentation of its strategy, dubbed
"Awakening the Lion" after Generali's logo of the lion of Trieste,
Mr. Costamagna and Mr. Cirina complained of sluggish growth under
current chief executive Philippe Donnet, and that the company has
lagged continental rivals AXA SA, Zurich Insurance AG and Allianz
SE.
The rival team is pledging net income of 4.2 billion euros
($4.62 billion) in 2024, with compound annual growth in earnings
per share of 14%, and cumulative available cash generation of
around EUR9.5 billion-10.5 billion over 2022-24.
It says it will achieve this by cutting costs overall by around
EUR600 million, restructuring geographic presence, improving
operating performances in individual countries, and using more
technology and data.
It also plans to maximize potential cash available for M&A
up to about EUR7 billion through "efficient use of leverage."
At a December strategy day, Mr. Donnet proposed EPS growth of
6%-8% and net cash generation of more than EUR8.5 billion in
2022-24.
The rival team also alleges the company has concentrated
"excessive powers on the CEO over time" and complain of the
"significant influence" of the main shareholder Mediobanca SpA.
In a statement, a Generali spokesman told Dow Jones Newswires:
"Under the leadership of Mr. Donnet, the group has successfully
executed two strategic plans that have led to the best performance
ever last year."
Generali also said 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.
Tensions at the top of the company have spilled out in recent
days when Mr. Cirina was suspended by Generali on Wednesday after
being included in Mr. Caltagirone's rival slate of nominations for
the company's board.
Mr. Caltagirone is joined in his quest to unseat the current
board by Leonardo Del Vecchio, the billionaire chair of eyewear
titan EssilorLuxottica, setting themselves--Generali's second- and
third-largest investors--against the insurer's top shareholder,
Mediobanca.
Investors will decide at the company's AGM on April 29 whether
to vote for Donnet's continued leadership or change direction.
Write to Ed Frankl at edward.frankl@dowjones.com
(END) Dow Jones Newswires
March 25, 2022 07:29 ET (11:29 GMT)
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