A key proxy adviser told Enel SpA shareholders to reject the Italian government’s choice for the company’s next chairman, as investors turn up the heat in a battle over nominations made by Prime Minister Giorgia Meloni.
(Bloomberg) — A key proxy adviser told Enel SpA shareholders to reject the Italian government’s choice for the company’s next chairman, as investors turn up the heat in a battle over nominations made by Prime Minister Giorgia Meloni.
Glass Lewis & Co. LLC is backing an alternative candidate for the post at state-controlled Enel, according to a report prepared by the adviser which was seen by Bloomberg. Shareholders will vote on the company’s new board May 10.
That candidate, banking executive Marco Mazzucchelli, was initially proposed earlier this month by London-based fund Covalis Capital, which says it owns about 1% of Enel’s share. Covalis came out against the government’s list of board candidates, calling the nomination process “opaque.”
The dispute marks the first-ever shareholder battle over board nominations at Enel, Italy’s largest listed company, and it represents a stark challenge to Meloni, who’s sought to portray her right-wing government as pro-business.
Glass Lewis’s recommendations call for investors to vote for Mazzucchelli as chairman over the government’s choice, industry veteran Paolo Scaroni, a former CEO at oil major Eni SpA.
Mondrian Investment Partners, which says it owns about 1.7% of Enel, said Friday that it will also vote for the list including Mazzucchelli as it favors an “independent” chairman. The California State Teachers Retirement System on Saturday disclosed it will support both Scaroni and Mazzucchelli as chairman.
As Enel’s new chairman Mazzucchelli, a board member at Quintet Private Bank Europe SA, would better safeguard “board-level independent oversight and serve as a better counterbalance to the presence of the CEO,” the proxy adviser said.
The 76-year-old Scaroni has widely been seen as a compromise nominee for the post at Enel, in the wake of wrangling between Meloni and her junior coalition partners. An ally of ex-Premier Silvio Berlusconi, Scaroni is currently chairman of soccer club AC Milan. As Eni’s CEO, he worked to deepen ties with Russia’s Gazprom.
The change in management at Enel comes in the midst of a push to sell off assets to cut debt that ballooned to almost €70 billion ($77 billion) during 2022, as the company expanded abroad. The utility is currently working its way through a planned €21 billion in disposals under a project kicked off last year by outgoing CEO Francesco Starace.
Still, not all advisers are on the same page in terms of what’s next for the utility. Institutional Shareholder Services Inc. has recommended backing Scaroni.
(Updates with California State Teachers Retirement System in sixth paragraph)
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