Record payday followed clashes with top shareholder
MILAN (Reuters) — Departing Telecom Italia (TIM) chief executive Flavio Cattaneo has defended what is likely to be a multi-million euro severance package, saying he delivered on many of his goals ahead of time, according to La Repubblica newspaper.
TIM's board is set to discuss on Monday Cattaneo's departure after just 16 months in the job following clashes with top shareholder Vivendi.
Under a "special award" clause in his contract, Cattaneo could claim up to 40 million euros ($47 million) if his term is terminated early or his powers reduced.
One source close to the situation said he would get 32 million euros, the biggest severance pay ever awarded to an executive in Italy after just over one year in office.
"My contract was linked to (meeting the targets) and now simply needs to be respected. The severance package I will get is not a scandal," Cattaneo was quoted as saying in La Repubblica by a person close to him.
Sources familiar with the matter said on Friday Vivendi executive Amos Genish, a former head at Telefonica's Brazil unit, was set to be appointed as TIM's managing director, effectively taking over from Cattaneo.
La Repubblica said Cattaneo fell out with Vivendi, which has a 24-per cent stake in TIM and has been tightening its grip on the company, because of its plan to appoint Genish at his side.
Several sources have also said Vivendi grew unhappy after Cattaneo became embroiled in a row with Italy's government over the rollout of ultrafast broadband.
Shares in TIM rose more than three per cent on Monday, as analysts bet management change could help improve TIM's relationship with Rome. They also expect the cost-cutting drive set in motion by Cattaneo to continue. TIM is expected to report another strong set of results later this week.
"The strategic uncertainty could be balanced by a more positive relationship with the government and on speculation for potential corporate action," Banca Akros said in a note, citing the possibility of TIM spinning off its fixed line network.
TIM said on Sunday Cattaneo was leaving because the company had "reached important results ahead of plan, which allows it to start a new phase." It dismissed suggestions that the break-up was linked to clashes with Rome.
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