MILAN, March 23 (Reuters) - Directors at Monte dei Paschi di Siena are set to challenge the position of CEO Luigi Lovaglio on Monday after he made a bid to secure another term at the helm despite the
Monte dei Paschi's board expected to strip CEO of powers, sources say
Boardroom Developments at Monte dei Paschi di Siena
By Valentina Za
CEO Luigi Lovaglio Faces Loss of Executive Powers
MILAN, March 23 (Reuters) - Monte dei Paschi di Siena's directors are expected to remove the executive powers of boss Luigi Lovaglio after the chief executive made a bid to secure another term despite board opposition, two people close to the matter said.
The board did not finalise its decision at a meeting on Monday, however, and is expected to resume the discussion on Tuesday to approve a move to leave Lovaglio in the job without his current powers, the people said.
Dual Roles and Succession Planning
Lovaglio is both CEO and general manager of Italy's third-largest bank and the board is looking for a suitable solution over both roles, the people said.
Shareholder and Board Dynamics
Lovaglio, 70, whose current term ends next month, was put forward on Saturday for a new mandate as CEO by Monte dei Paschi (MPS) shareholder PLT Holding, although the bank's board had ruled him out and proposed three alternative candidates.
Ahead of a vote by MPS shareholders on a new CEO and board on April 15, the board met on Monday to examine PLT's slate of nominees and discuss Lovaglio's role after he challenged his own exclusion, people with knowledge of the matter told Reuters.
MPS Bailed Out by Government in 2017
The board was expected to seek the CEO's resignation, sources had said earlier, adding Lovaglio could be stripped of his delegated powers if he stayed on, while a dismissal appeared a remote option.
The ECB declined to comment about the boardroom crisis at the bank, which the government bailed out in 2017 and returned to private hands in 2023-2024.
Recent Strategic Moves and Restructuring
The lender last year shocked Italy's financial world by bidding for bigger rival Mediobanca, and acquiring 86% of it.
Long Italy's biggest banking problem, MPS has restructured under Lovaglio, who took over as CEO in 2022.
Lovaglio lost the board's support and clashed with a major investor, as he accelerated plans to buy the remaining 14% of Mediobanca and take it private.
(Reporting by Valentina Za; Editing by Kirsten Donovan, Jan Harvey and Rosalba O'Brien)
