ROME (Reuters) - The Italian government is facing opposition to its proposed candidates to run Enel (BIT:ENEI), one of Europe's largest utilities, before a shareholder vote on Wednesday.
The tussle has developed into a broader test of Rome's sway over state-backed firms which are listed on the stock exchange, and the outcome of the vote appears uncertain.
Following is a summary of the various positions:
WHAT HAS THE GOVERNMENT PROPOSED?
The Treasury, which owns a 23.6% stake in Enel, has proposed Flavio Cattaneo as chief executive to replace Francesco Starace, who had led Enel since 2014.
Cattaneo is currently vice president of high-speed train operator Italo and has previously run Telecom Italia (BIT:TLIT) and power grid group Terna.
The Treasury also chose a new chairman for Enel, tapping Paolo Scaroni, who is a former CEO of both Enel and energy company Eni and whose current roles include chair of soccer club AC Milan.
WHAT ALTERNATIVES HAVE BEEN SUGGESTED?
London-based hedge fund Covalis Capital, which owns about 1% of Enel, has presented an alternative list of board candidates, including former top banker Marco Mazzucchelli as chairman.
Covalis said the system that led to the government's nominations "undermines investor confidence, erodes value and is out of line with international standards of best practice in shareholder democracy".
The hedge fund did not propose a CEO candidate, but said in a letter to Enel's investors that it would reopen the process to appoint a chief executive if its slate gets enough backing and Mazzucchelli is elected chairman.
Mondrian Investment Partners, which holds 1.7% of Enel shares, has thrown its weight behind the Covalis list of board candidates.
HOW HAVE THESE PROPOSALS BEEN RECEIVED?
Investor advisory group ISS has recommended shareholders back the Treasury's pick of Scaroni as chair and signalled its support for Cattaneo as chief executive.
However, ISS expressed concern about the "lack of relevant skills and experience" of four other board candidates put forward by the Treasury and instead backed the nominees proposed by asset manager association Assogestioni, which represents institutional investors.
Fellow proxy adviser Glass Lewis has recommended shareholders back Covalis' candidate Mazzucchelli for the chairman role, as he is seen as better placed to counterbalance the chief executive's presence on the board.
Proxy adviser Frontis Governance has recommended backing the candidates promoted by Covalis and reject names put forward by the Treasury, in a report tailored for Switzerland's Ethos, a group of pension funds and other investors.
Norway's sovereign wealth fund has said it will vote in favour of Mazzucchelli as chairman. The fund also said it would back other board nominees proposed by Assogestioni.
Covalis has criticised Assogestioni for not backing calls for an independent chair for the utility and it wants to develop a new organisation to promote corporate governance reform.
WHAT IS STARACE'S POSITION ON THIS?
Outgoing CEO Starace has indicated that he will stay on for
no more than a month to help the transition towards a new management, reiterating that he was not available for another three year-term.
The current board has said they will not comment on the issue until after the shareholder vote.
CHAIRMAN AND CEO APPOINTMENTS
Shareholders will vote to pick the chairman of the board during the AGM, while the new CEO will be appointed by the new board of directors in a future meeting.