Shakeup at Generali: Gutty, Cerchiai Resign as Joint CEO’s

April 29, 2002

Confirming rumors that have been floating around the Italian financial community for the last few weeks, Generali, the country’s largest insurer announced at its annual shareholders’ meeting in Trieste on Saturday that it will be headed by only two joint CEO’s rather than three, and that Gianfranco Gutty and Fabio Cerchiai had resigned their positions as joint CEOs.

Gutty will remain on Generali’s Board of Directors, and will continue to serve as chairman, while Cerchiai will also remain as a board member. Sergio Balbinot, the company’s general director for international activities, will join Giovanni Perissinotto as the new joint CEO, responsible for international activities and reinsurance operations.

Analysts saw the move both as a sign of dissatisfaction with Gutty on the part of Mediobanca, the financial conglomerate that controls 13.72 percent of Generali’s shares, and as a move to position the company to expand further outside of Italy. The dissatisfaction was rumored to be caused by Gutty’s rejection of a proposed alliance with asset manager Mediolanum which is run by Ennio Doris, the business partner of Italian Prime Minister Silvio Berlusconi.

According to a report from Dow Jones Newswire, however, Gutty was pleased with the move, and indicated it came from the shareholders. He’s said to be looking forward to his new role, and was reported to have stated that, “I will have the hard task of strategic orientation and controll…over the two young chief executives.” [Perissiotto is 49 and Balbinot is 44]

Although Gutty characterized the change as a “compromise” with Mediobanca, it would still seem to have at least some of the venerable overtones of of the ingrown, if not incestuous, Italian financial world, which, while it’s primarily about money and power, also reflects the country’s business traditions, family alignments, social ties and political alignments.

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