The board of directors of Banca Monte dei Paschi di Siena has chosen Fabrizio Palermo as the “sole” candidate for the role of future CEO of the bank, preferring the current number one of the utility Acea to the bankers Corrado Passera and Carlo Vivaldi, initially indicated by the board of the Sienese bank among the trio of potential future CEOs.
The reasons for the choice
The choice of Palermo, explained MPS, is the result of a “structured process”, conducted with the help of independent advisors and under the supervision of the appointments committee, which analyzed “a large pool of candidates” and verified their “suitability requirements”. Palermo received the “highest” score based on a series of criteria that include “professional experience, managerial skills and consistency with the strategic needs of the bank”. His profile was deemed “the most suitable” to “support the bank in the phase of industrial transformation and ongoing strategic evolution” in light of “the proven experience in the management of complex organizations, in change processes and in managing the main levers of value creation”.
The profile of Palermo
Palermo, 55 years old, began his professional career in the London offices of Morgan Stanley, in the Investment Banking Division, and then moved to McKinsey at the end of the nineties, specializing in the recovery, transformation and relaunching of large industrial and financial groups. From 2005 to 2014 he worked for the Fincantieri group, rising through the ranks to become deputy general manager. In 2014 he moved to CDP as CFO and then became, from July 2018 to May 2021, Chief Executive Officer and General Manager of the Bank. He has been on the boards of, among others, Open Fiber, Fincantieri and Generali: he joined the Leone board a year ago, elected on the list presented by the Caltagirone family.
The delicate moment
The decision to focus on a single name follows the presentation by PLT Holding, the holding company of the Tortora family, of an alternative list to that of the board, led by the current CEO of MPS, Luigi Lovaglio, and is justified by the need to offer shareholders a clear indication, also in view of the assembly vote.
The choice of Palermo as CEO was accompanied by the definition of an order of the candidates on the list, which opens with the president Nicola Maione and follows Palermo, Passera and Vivaldi. The Board of Directors will instead need additional investigations to decide how to proceed with Lovaglio, who disregarded the board’s desire to replace him and did not inform him of his intention to run on another list. The board will meet again today, after carrying out further investigations into the measures to be adopted, which include dismissal, revocation of delegations and a reduction in powers.
Comparison with the market
The choice of a single candidate is a prelude to the start of the comparison of the two lists with investors and especially proxy advisors, whose indications could prove decisive in light of the fact that almost 60% of the bank is in the hands of the market. If the Caltagirone group should support the list of the Board of Directors, in which it expresses two of its managers, the orientation of the other relevant shareholders is more uncertain: Delfin, the first shareholder with 17.5%, is said to be able to abstain, like the Treasury (4.9%), which was leaning towards a reconfirmation of Lovaglio, while the orientation of Banco BPM (3.8%) is not known. Alongside the two majority lists, there is also Assogestioni’s minority list.
