The profit, in excess of 2,500 million euros thanks to the rise in electricity prices, stole the spotlight from the rest of the issues in Endesa’s results presentation held on February 24. However, at the bottom of the page, the CEO of the electric company, José Bogas, referred with his usual bonhomie to the continuity at the head of Enel of Francesco Starace, the first executive in Italy and main supporter of the Madrid manager within the all-powerful parent company. transalpine. During the conclave, Bogas did not hesitate to align himself with Starace and to show his preference for him to continue in office, assuming with sportsmanship that a replacement at the head of the group after the arrival of Giorgia Meloni and her far-right associates would not be, in any case, “the end of the world”. Whether it is or not, the time to deal with that changing of the guard has arrived.
The Executive announced this week, after intense negotiations between the main actors of the coalition, far-reaching changes in the leadership of large public companies. Starace will not renew for a fourth three-year term – something that, admittedly, has never happened at Enel – and will be replaced by an almost newcomer to energy like Flavio Cattaneo, a Meloni concession to Vice President Matteo Salvini’s far-right League at the expense of the best qualified applicant, Massimo Donnaruma, current head of the Italian Electric Network (Terna). Sources close to Enel explain that Cattaneo, who has managed in emblematic public firms such as Rai or Telecom Italia, will in all probability design a new team in the medium term and that this will affect Spain. Along these lines, they add that the four-year renewal of Bogas as CEO, agreed at the meeting held in April 2022, was already approved with an asterisk and included a kind of unwritten agreement or clause according to which his future was linked to the continuity of Starace and the will of the new chief executive in Rome. They also make it clear that his age, well over 70 in 2026, does not help if a thorough restructuring of the teams and divisions is proposed from Italy.
The bill for his departure, however, will not be small for the new tenant of Viale Regina Margherita. As stated in Endesa’s official documents that define the remuneration policy for directors for the period 2022-2024, dated April 29, 2022, the Bogas contract “does not provide compensation for termination of office”. However, when this happens, his previous senior management relationship with the house will be extinguished in parallel and, for this reason, he will be entitled to receive a net amount that, updated in the last corporate governance report, rises to 7.34 million . A millionaire amount for someone who has been in the house for four decades and which includes a two-year non-competition agreement, but not the defined benefit savings systems. This title grants him “an annual and constant life annuity, once the retirement age of 65 years has been reached and having ceased his position as CEO”, of 898,000 euros, including the public pension. Bogas has consolidated long-term savings for 13.8 million.
As much as Starace has sold his exit as the architect of decarbonization and the great green transformation of the company in the last decade, his luck always seemed cast as an executive appointed in his day by the socialist Matteo Renzi. In addition to Cattaneo, Paolo Scaroni will assume the presidency of the company. Visible head of AC Milan football, his relationship with Silvio Berlusconi is long-standing. “There are two appointments with a large political component,” explain Italian political sources. “Right now, the game of balances is essential and it has not been easy to agree on the names. Meloni has yielded in the case of Enel in front of his two fellow travelers in the Government. Cattaneo is a manager used to making adjustments and dealing with debt, which is a problem for Enel. Above all, it is a very executive profile. The normal thing is that some time is granted to study the situation and that in the next six months nothing happens. Afterwards, he will make decisions with complete security ”, they conclude.
The markets penalized at the first exchange the appointment of Cattaneo, who passes from one day to the next of the high-speed train operator Italo to consolidate the commitment to renewable energies in which he is not an expert. Salvini, his main supporter, has publicly defended Italy’s commitment to nuclear energy as the “safest and cleanest” option. Scaroni himself, with a long history in the oil sector and with almost a decade in charge of Eni, has often dragged his feet in promoting clean energy. Endesa’s strategic plan currently in force calls for a 15% increase in investment, reaching 8,600 million. Of this amount, the development of renewable power absorbs half the effort. Endesa does not escape uncertainty about the model generated by the new status quo.
On the positive side, the choice of two respected professionals to lead the Italian utility, beyond their obvious political ties, points to a sensible change in the different management areas of the Italian giant. Gone are the first fears that Meloni’s triumph would cause an earthquake in public companies, with radical changes in profiles also in their subsidiaries, a species that was well in charge of making a part of the Spanish right run. The recent visit of Pedro Sánchez to Rome, in which a certain tune was staged by the leader of Fratelli d’Italia, should also help to smooth over any stridency.
Enel has not only squeezed Endesa to the limit, to the point of amortizing all its investment via dividends, but it already adds juicy latent capital gains if the firm’s capitalization is taken into account. It is worth remembering, in the days when Ferrovial said goodbye to Spain of its own accord, how in the Zapatero era a flagship and strategic company was delivered to Italy. Hard to imagine it the other way around. Today, and for years, the continuity of Endesa’s executives has been analyzed based on the maneuvers of the Italian Government. Because misery.
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