A milestone for Venice, but also a very personal one for the Generali CEO.
(Photo: ROPI)
Venice At the beginning of April, Philippe Donnet was walking across Venice’s St. Mark’s Square when suddenly an opera singer began to sing an aria – directly from the palazzo, which the Generali boss had extensively renovated. The building remained closed to the public for five centuries, now a Generali Foundation, an exhibition and NGOs are moving in. Star architect David Chipperfield, three Italian ministers, and Venice’s mayor praised Donnet as a “true Italian” attended the opening.
The project is a milestone for Italy, but also for Donnet personally, who pushed it forward. The beautiful pictures from the lagoon city are a welcome distraction from the nervousness that is currently spreading in the executive floor: This Friday there will be a big showdown at the virtual shareholders’ meeting.
Frenchman Donnet, 61, would like to serve a third term. But there could be a neck-and-neck race at Germany’s second-largest insurer. His challenger: Luciano Cirinà, 57, supported by billionaire shareholders who struggle with Donnet’s course.
For months, the conflict between the camps has been smoldering, which “paralyzes the entire company,” as one of middle management emphasizes. And analysts have been suspicious of the quarrels for some time. On the one hand there is the Donnet parliamentary group, led by the Italian bank Mediobanca, which has 17.2 percent of the voting rights. There are also many institutional funds from abroad.
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On the other side are the major shareholders Francesco Gaetano Caltagirone (media entrepreneur) and Leonardo del Vecchio (founder of the eyewear company Luxottica), who are gathering more and more voices. According to reports, it should already be almost 25 percent.
Most analysts still see the Donnet camp ahead. It could now depend on small investors: 23 percent of Generali shares are in free float. The most recent campaign of the alternative list was also aimed at them: in full-page advertisements, a lion roared at the readers (“Awakening the Lion”) – an allusion to the Generali logo. “You can be part of a historical change,” they advertised there.
The personal relationship between the two is “damaged”
Donnet has been with Generali since 2013, first taking over the post of Italy boss and three years later becoming global CEO. The engineer started his career at French competitor Axa and worked his way up there. In 2007 he moved to the Wendel investment company, where he managed the Parisian’s Asia-Pacific business from Singapore.
The Frenchman never tires of underlining his own successes: in 2021 he met or exceeded all goals, he said at the strategy day in December. Since taking the helm in 2016, the return on shares has been higher than its European peers. On top of that, he achieved a record result in the midst of the pandemic.
The Generali veteran was in the group for 33 years before he was fired a month ago.
(Photo: Reuters)
All this is not enough for challenger Cirinà. The Generali veteran, who most recently managed the business for Austria and Eastern Europe from Prague, has been with the group for 33 years. Or rather: was. After the alternative list was presented a month ago, Cirinà was suspended – and terminated without notice shortly thereafter. Generali accuses the Italian of “violating the duty of loyalty”. Cirinà has engaged his lawyers.
The personal relationship with Donnet “is at least damaged,” as Cirinà explains in an interview with the Handelsblatt. But he believes that in a well-run company, anyone is free to run for positions. He had been dissatisfied with the development for a long time and actually wanted to quit. But then came the call from Caltagirone, says Cirinà in fluent German. The image of a “hostile takeover” drawn in Italy is not correct. “Caltagirone and Del Vecchio are shareholders who have known the company long enough and have convinced themselves over the past few years that something needs to change.”
Cirinà’s plan includes more money for acquisitions – and twice as much profit as Donnet promises. “A little more efficiency should be demanded from all units,” says the economist. Cirinà sees the greatest potential in Italy. “We have the largest network here, but the operating result has stagnated for four years.” He also wants to invest more in countries like China and India.
Should he come to power, he does not want to rule out job cuts per se. He refers to the long tradition that Generali has with the social partners. You have “always found a satisfactory solution”. He owes everything in his professional life to Generali, he emphasizes. “Loyalty is always with the company.”
More: The insurers Zurich and Axa want to pass on old portfolios to liquidators with high interest rates. A Generali deal from 2019 is considered a role model.