MILAN, Oct 8 (Businesshala) – Mediobanca (MDBI.MI) on Friday backed a request by its top shareholder Leonardo del Vecchio to do away with the rule for Italian merchant bank managers to reserve up to three board seats.
Welcoming the decision “with deep satisfaction”, del Vecchio withdrew a second motion to amend the company’s bylaws, which had been criticized by Mediobanca’s board.
Mediobanca also complained that Del Vecchio failed to discuss the company’s proposals, which it wanted a shareholder vote to vote on at its October 28 general meeting, considered standard practice for listed companies.
Del Vecchio last month proposed revising Mediobanca’s governance rules to make the board more diversified and independent of management, in its first formal move to promote changes to the group since becoming its largest investor. .
The 86-year-old founder of glasses giant Luxottica bought 19% of Mediobanca after receiving approval from European regulators on the condition that he would not interfere with the bank’s operations.
Del Vecchio has been critical of Mediobanca CEO Alberto Nagel’s strategy in the past, although he has praised Nagel’s latest business plan.
The two are also embroiled in a governance conflict at Italy’s largest insurer Generali (GASI.MI), in which Del Vecchio and Mediobanca are both investors.
Mediobanca said the company had benefited from having top managers among its directors, but it was a statutory requirement that it plans to ax next year in light of discussions with institutional investors and shareholder advisory firms.
Mediobanca was critical of del Vecchio’s second proposal, which stated that it risks penalizing institutional investors who own half of Mediobanca.
Del Vecchio’s holding company, Delphine, said late on Friday that it would withdraw the offer to avoid confusing investors, noting that Mediobanca’s board had decided to present an alternative proposal if rejected by del Vecchio. was done.
Currently, the majority of Mediobanca’s directors come from the list that receives the most votes from the shareholders, with two seats reserved for the list with the second most votes.
Del Vecchio proposed increasing the number of seats reserved for minority lists to three or four, each appointing a director based on the number of votes cast, provided they exceeded the 5% threshold.
Under the alternative resolution of Mediobanca’s board, one-fifth of the directors would come from minority lists, with at least one seat reserved for representatives of institutional investors. The 5% limit will be reduced to 2%.
“Delphine has finally been able to speed up a process to reform Mediobanca’s governance … to increase the accountability of management,” Delphine said.
“In the light of this fundamental result, while Delphine believes its offer is better … it is in the interest of the Bank and its shareholders … only the Board’s resolution is placed before the shareholders.”