MILAN (Reuters) -Italy's largest insurer Generali (MI:GASI) said on Monday it had fired veteran executive Luciano Cirina, who is publicly challenging incumbent Philippe Donnet for the role of chief executive, for alleged breach of contract.
Cirina, who was head of Austria and the CEE countries at the insurer, has been proposed for the top job by a leading Generali investor in a power struggle which will be put to a shareholder vote on April 29.
"The decision has been taken due to violations of his duty of loyalty and material breach of other personal obligations under his contract of employment," Generali said in a statement.
There was no immediate comment from Cirina who presented his camp's alternative plans for the insurer at a news conference in Milan on Friday, alongside Claudio Costamagna, the rebel shareholder's candidate to chair the group.
Italian unions said on Monday they were concerned that cost-cutting targets for Generali proposed by the two men could present serious problems for the sustainability of employment at a company of national importance.
Francesco Gaetano Caltagirone, who owns more than 9% of Generali, wants to replace Frenchman Donnet, who has been CEO since 2016, and install Cirina in his place.
The Generali board has proposed Donnet for a third term, with backing from the group's single biggest shareholder Mediobanca (OTC:MDIBY).
'AWAKENING THE LION'
Caltagirone's team set out their stall on Friday with a plan dubbed "Awakening the Lion", a reference to Generali's nickname "The Lion of Trieste", which features on its logo. They want to boost earnings growth, cut costs, and do bigger M&A deals.
The challengers aim to lift earnings per share growth, including from acquisitions, to more than 14% over the 2021-2024 period. That compares with Generali's target of 6-8% and would make the group a best-in-class according to analysts. The rebels also want to reduce the cost-income ratio to 55% from 64%.
Generali shares rose 4% to their highest level in more than a decade on Monday, as the shareholder battle stoked buying.
Berenberg said in a note that victory by a tight margin for the current management would be the best outcome for investors, adding that this would result in it over-delivering on Generali's growth rate target of 6-8% of its earnings per share.
"We believe the reelection of the existing management team is the most likely outcome, as this team has established a strong track record in the past six years," it added.