Reuters logo
Exclusive: Telecom Italia CEO Cattaneo set to step down
July 21, 2017 / 1:52 PM / 4 months ago

Exclusive: Telecom Italia CEO Cattaneo set to step down

MILAN (Reuters) - Telecom Italia’s (TLIT.MI) board will discuss on July 24 the departure of Chief Executive Flavio Cattaneo, the company said on Friday, confirming a Reuters story that Cattaneo would leave soon following clashes with top shareholder Vivendi (VIV.PA).

Telecom Italia Chief Executive Officer Flavio Cattaneo looks on during a meeting in Rome, Italy November 18, 2016. REUTERS/Remo Casilli

In a statement, Telecom Italia (TIM) said its remuneration and appointments committee would also meet on July 24 to discuss “a proposal to end the relationship (with Cattaneo) by mutual consent.”

Earlier on Friday, sources familiar with the matter told Reuters Cattaneo would step down within days.

A top Vivendi executive, Amos Genish, is set to be appointed as TIM’s managing director, effectively taking over from Cattaneo, the sources said, speaking on condition of anonymity as the decision isn’t public.

Vivendi declined to comment, while Cattaneo did not reply to an emailed request for comment.

Relations between the 54-year-old Cattaneo, who took over as TIM’s boss in March 2016, and the French media group which owns 24 percent of the phone company have soured in recent weeks, several sources have said.

According to them, Vivendi, which had previously praised Cattaneo for cutting costs at the indebted Italian firm, grew unhappy after he became embroiled in a row with Italy’s government over the rollout of ultrafast broadband.

This upset Vivendi, which is already under scrutiny for its growing influence in Italian business through its stake in TIM and a 30 percent share in private broadcaster Mediaset (MS.MI).

One source said on Friday that Vivendi had explored the possibility of limiting Cattaneo’s powers by appointing other managers but added that option was no longer on the table.

SPECIAL AWARD

Genish, an Israeli citizen, was appointed Chief Convergence Officer of the French media group led by Vincent Bollore in January. He is a former head of Telefonica’s (TEF.MC) Brazil unit and founder of Brazilian telecoms company GVT.

Vivendi has since turned to him to integrate all the content it produces and delivers to clients. At Telecom Italia, he would work closely with chairman Arnaud de Puyfontaine, who is also Vivendi’s CEO.

Two sources said Giuseppe Recchi, currently TIM’s deputy chairman, could replace Cattaneo as CEO, though a third said the CEO job would not be filled for now.

Cattaneo has been negotiating his severance package and is close to an agreement, three sources said.

They said he would likely get less than the maximum 40 million euros ($47 million) he could claim under a clause in his contract. One source said he would get 32 million euros.

Cattaneo’s multi-million wage and benefit package envisaged a performance-based “special award” of up to 40 million euros - or 10 million for each of the four years of his mandate.

The award could be paid in its entirety in case of early departure, according to a company remuneration report.

STRAINED

After his predecessor Marco Patuano, Cattaneo is the second CEO to quit since Vivendi tightened its grip on TIM.

One source said Cattaneo was viewed by the French group as too “independent”; another said there were divergences over Vivendi’s decision to sell TIM’s stake in broadcasting services group Persidera to win European Union approval for the French group’s plan to gain de facto control of TIM.

Cattaneo’s exit could raise more concerns in Rome about Vivendi’s sway over Italian business. In April, communications authority AGCOM ordered Vivendi to cut its stake in either TIM or Mediaset, ruling it was in breach of rules designed to prevent a concentration of power.

On Wednesday, Italy’s markets watchdog Consob ordered inspections at TIM’s offices to assess how much influence Vivendi has on the group’s management, sources said.

Telecom Italia’s shares have fallen on speculation that Cattaneo may leave, and shed 0.4 percent on Friday following the Reuters report of his imminent departure.

Additional reporting by Gwénaëlle Barzic in Paris, Stephen Jewkes and Stefano Rebaudo in Milan; Editing by Silvia Aloisi and Mark Potter

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below