Monte dei paschi not expected to renew CEO lovaglio

MPS board set to exclude CEO Lovaglio from list of nominees seeking new mandate

Boardroom Clash and CEO Exclusion at Monte dei Paschi di Siena

By Valentina Za

Background on the Board's Nomination Process

MILAN, March 4 (Reuters) - A boardroom clash at Monte dei Paschi di Siena is expected to lead the board of the Tuscan bank to exclude CEO Luigi Lovaglio from the list of candidates for a new mandate, two people with knowledge of the matter said.

The board initially included Lovaglio in a preliminary list of 30 candidates drawn up for the April vote, alongside veteran banker Corrado Passera, former UniCredit executive Carlo Vivaldi and utility ACEA CEO Fabrizio Palermo.

Nomination Committee's Decision

However, the board's nomination committee on Tuesday removed Lovaglio from a shorter list of 20 names the board is expected to approve later on Wednesday, the sources said.

Governance Rules and Board Election

Pending European Central Bank approval of new governance rules that allow outgoing directors - and not just shareholders - to put forward candidates, the bank's board is drawing up a list of nominees to elect a new board in April, including a chief executive and chairman.

Shareholder Dynamics and Recent Developments

After leading MPS to take over bigger rival Mediobanca last year, Lovaglio has irked major shareholder Francesco Gaetano Caltagirone and some directors by pushing through plans to acquire the remaining 14% of Mediobanca and delist it.

Lovaglio's position has been weakened by a criminal probe into the Mediobanca takeover by Milan prosecutors and the fact that Italy's government, which still holds 4.9% of MPS, took a step back amid the judicial turmoil after initially endorsing the manager.

Potential for Lovaglio's Return and Shareholder Support

Lovaglio could be put forward for a new mandate by a shareholder but the 70-year-old banker, who took the reins at MPS in 2022 and turned it around, has not yet decided whether he wants to stay on, a person familiar with his thinking said.

Lovaglio has been endorsed by MPS' single biggest shareholder, the Del Vecchio family's Delfin holding vehicle which, however, is embroiled in disagreements among the heirs of late billionaire Leonardo Del Vecchio. 

(Reporting by Valentina Za, editing by Giselda Vagnoni and Louise Heavens)