Generali's Crossroads: Strategic Abstention Amid Board and Shareholder Turbulence

The upcoming April 2025 shareholder meeting for Italian insurance giant Generali (GEN: Milan) has become a focal point for investors, as key shareholders maneuver through a complex web of alliances and strategic priorities. The Benetton family’s holding company, Edizione, has taken a pivotal stance: approving 2024 financial results while abstaining from voting on the board slate proposed by Mediobanca. This calculated move underscores a broader struggle over Generali’s governance and future direction.

Approval of Financials: A Vote of Confidence

Edizione’s explicit endorsement of Generali’s 2024 financial statements and remuneration report signals satisfaction with the current management’s performance. The company reported a 5.4% rise in adjusted net profit to €3.77 billion, alongside an 11.7% dividend increase to €1.43 per share—a record payout. This financial strength, driven by robust underwriting performance and asset growth, has positioned Generali as a resilient player in a volatile market.

The Abstention: A Neutral Stance on Governance

The abstention on Mediobanca’s proposed board slate—led by CEO Philippe Donnet and board member Carlo Sironi—reflects Edizione’s cautious approach. While the slate enjoys support from proxy advisors and Mediobanca’s 13% stake, Edizione aims to avoid locking into a board that may face challenges. Mediobanca itself is embroiled in a public exchange offer with Banca Monte dei Paschi di Sicilia (MPS), raising questions about its focus on Generali.

The decision also highlights Edizione’s preference for maintaining “operational stability” amid shifting shareholder dynamics. This neutrality could pressure Mediobanca to balance its influence over Generali with its MPS-related obligations, a potential vulnerability for investors betting on consistent leadership.

Shareholder Crosscurrents: Beyond the Benettons

Generali’s governance is further complicated by competing agendas:
- Caltagirone Group (7% stake): Opposing the proposed merger with Natixis Investment Managers, Caltagirone seeks to block the deal without nominating an alternative CEO. This reflects concerns over strategic direction but avoids destabilizing the board.
- Mediobanca’s Dilemma: As Generali’s largest shareholder, Mediobanca’s focus on MPS could distract from its governance role at Generali, creating uncertainty for proxy advisors and smaller shareholders.
- Undecided Players: UniCredit (6.5%) and Fondazione CRT (3.2%) remain neutral, adding unpredictability to the vote tally.

Regulatory and Strategic Risks

Generali’s €35.6 billion holding in Italian government bonds (BTPs) remains a critical asset, underpinning its ability to meet insurance liabilities. However, regulators have raised concerns about the Natixis merger, demanding guarantees that Generali retains control over domestic bond allocations. This regulatory scrutiny could delay or reshape the deal, impacting long-term growth prospects.

Investment Implications: Weighing Stability Against Uncertainty

Investors must balance Generali’s strong fundamentals—record profits, rising dividends, and BTP-backed liquidity—with governance risks. While the financial statements approval suggests near-term stability, the board vote’s outcome could sway investor sentiment. A Mediobanca-led board might prioritize aggressive growth, while a more neutral board could focus on steady returns.

Conclusion: A Delicate Equilibrium

Generali’s shareholders are at a crossroads, with Edizione’s abstention emblematic of a sector-wide struggle between stability and transformation. The company’s 2024 performance—highlighted by a €3.77 billion profit and 11.7% dividend increase—provides a solid foundation. However, the board vote’s outcome, regulatory clarity on the Natixis merger, and Mediobanca’s divided attention pose material risks.

For investors, Generali remains a compelling income play, given its dividend growth trajectory and BTP-backed balance sheet. Yet, governance uncertainty could amplify volatility. A cautious approach—monitoring proxy advisor shifts, stakeholder announcements, and regulatory developments—is warranted. Generali’s future hinges on whether its shareholders can navigate this turbulence without sacrificing the very stability that underpins its financial strength.

In short, Generali’s story is one of resilience but also of unresolved tensions. Investors must decide whether to bet on its proven track record or wait for clearer signals from the boardroom battlefield.