In reports issued by Institutional Shareholder Services (ISS) and Glass Lewis ahead of an April 29 general meeting to name a new board at Generali, the two proxy advisers urged shareholders to support the slate of board nominees put forward by the outgoing board.
The board’s proposed reappointment of Donnet has been challenged by Italian tycoon Francesco Gaetano Caltagirone, who owns more than 9% of Generali and is its second biggest shareholder behind investment bank Mediobanca (OTC:MDIBY).
Mediobanca backs Donnet, while Generali’s third-biggest investor, Italian eyewear billionaire Leonardo Del Vecchio, has sided with construction magnate Caltagirone.
The tussle for control of Europe’s No.3 insurer threatens the stability of a group that is a cornerstone of Italy’s financial system and a major holder of its public debt.
Glass Lewis said it did not believe Caltagirone’s alternative plan for Generali made a compelling case to suggest the group had suffered from poor operational performance, missed targets or subpar investor returns.
“We believe the Dissident’s central strategic thesis ultimately tilts from the attractively ambitious to the disconcertingly optimistic,” it said in the report, of which Reuters saw a copy.
In pledging to grow Generali’s earnings per share in coming years roughly twice as fast than envisaged by Donnet’s plan, Caltagirone has put forward a veteran Generali executive, Luciano Cirina, as his own CEO candidate.
“The dissident plan is indeed more ambitious than the company’s, but it appears unclear if Caltagirone’s offers a superior path after considering factors like execution skills, feasibility, and risk,” ISS said.
“In terms of governance, Caltagirone has been 14 years on the board and his accusations appear strangely timed after such a long tenure,” it added.