March 25 (Reuters) - Italy's third-largest bank Banca Monte dei Paschi di Siena said on Wednesday its board would revoke the powers granted to CEO Luigi Lovaglio, having chosen Fabrizio Palermo as its
Italy's MPS board strips CEO Lovaglio of powers as he stays on as director
MPS Boardroom Turmoil and Leadership Changes
MILAN, March 25 (Reuters) - Monte dei Paschi di Siena (MPS) said directors had decided to strip Chief Executive Luigi Lovaglio of his powers, after he bid for a new term at the helm challenging a decision by the board to rule him out.
Background of the Dispute
Lovaglio and the MPS board have fallen out over the CEO's strategy for recently acquired peer Mediobanca, with a major MPS shareholder also opposed to Lovaglio's push to fully merge the two banks.
Shareholder Involvement and Board Nominations
On Saturday, small MPS investor PLT Holding expressed support for Lovaglio's plan and put him forward for a new mandate, filing a slate of board nominees that challenges the list submitted by the bank's outgoing board.
Shareholders vote on the two slates on April 15, when they elect a new CEO.
Immediate Actions by the Board
MPS said in a statement that given PLT's move, the board had taken away Lovaglio's executive powers and stripped him of the role of general manager.
Temporary Leadership Arrangements
The board put Deputy General Manager Maurizio Bai in charge of the ordinary running of the bank until April 15.
Lovaglio's Position as Director
The board had pressured Lovaglio to resign, three people with knowledge of the matter said, but he stayed on and will now remain as a director until the general meeting.
Future Leadership Prospects
On Tuesday, MPS said its board had decided to propose Fabrizio Palermo, the CEO of Roman utility ACEA, as its sole CEO candidate for the bank, dropping a previous decision to have three possible candidates.
Lovaglio's Tenure and Bank Restructuring
Achievements and Reprivatisation
Lovaglio has led MPS since 2022, overseeing a restructuring of the bank which Italy's government had saved from collapse in 2017. MPS was successfully reprivatised during 2023-2024.
(Reporting by Valentina Za in Milan and Mrinmay Dey in Mexico City; Editing by Shilpi Majumdar and Alvise Armellini)
