Monte dei Paschi di Siena’s board proposes an MPS CEO change, replacing CEO Luigi Lovaglio with utility executive Fabrizio Palermo ahead of an April 15 shareholder vote, aiming to improve governance coordination and prepare the bank for upcoming market challenges.
Board Seeks Stronger Internal Coordination
Monte dei Paschi di Siena said Sunday its board proposes a leadership change designed to strengthen cooperation between executives and directors as shareholders prepare to elect a new board next month.
The Italian lender plans to replace Chief Executive Officer Luigi Lovaglio, who has led the bank since 2022, with Fabrizio Palermo, currently chief executive of utility company Acea, as part of the proposed MPS CEO change. The proposal follows what the bank described as a “careful and complex self-evaluation process” conducted by directors while drafting a candidate slate for the upcoming shareholder meeting scheduled for April 15.
According to a letter sent to shareholders, the board determined that new leadership could improve internal coordination and governance effectiveness during a period of evolving market conditions.
“The list proposed by the board aims to balance the need for both continuity and renewal,” the bank said, adding that the objective is an overall improvement in governance quality.
Shareholder Vote Looms as Leadership Debate Grows
Shareholders will decide whether to approve the proposed board and executive leadership during the annual meeting, which includes selecting the bank’s next chief executive under the MPS CEO change plan. Lovaglio has overseen the bank’s restructuring efforts since taking office in 2022, helping stabilize one of Italy’s oldest financial institutions following years of financial difficulties and state intervention.
Directors said the proposed leadership change is not a rejection of past management but part of preparing the bank for future strategic challenges.
The board said Palermo brings the “skills and strategic vision” needed to face imminent market pressures while fostering more inclusive engagement within the boardroom.
Analysts note that governance alignment has become increasingly important for European banks facing regulatory scrutiny, competition pressures, and changing economic conditions.
Continuity Maintained Through Chairman Role
Despite the proposed CEO change, the bank emphasized continuity within its leadership structure. Chairman Nicola Maione is expected to be reappointed alongside several outgoing directors.
MPS said Maione’s continued role would provide stability during the transition period while allowing new executive leadership to introduce strategic adjustments.
“The proposed structure combines renewal with institutional continuity,” the bank said in its communication to shareholders, highlighting the strategic importance of the MPS CEO change. The leadership decision comes at a pivotal moment for Monte dei Paschi di Siena as it works to reinforce investor confidence and position itself competitively within Italy’s banking sector.
If approved, the new board and chief executive would take charge following the shareholder vote in mid-April, setting the bank’s strategic direction for the coming years.
