January 31, 2023

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Italy to cap Monte dei Paschi CEO’s annual pay at 240,000 euros By Reuters

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© Reuters. FILE PHOTO: A Monte dei Paschi bank sign is seen in Rome, Italy September 30, 2018. REUTERS/Alessandro Bianchi/File Photo

MILAN (Reuters) – Italy is preparing to cap at 240,000 euros ($254,496.00) the yearly pay of top executives hired from 2023 in banks rescued by the state, a move that has bearings for the reappointment of Monte dei Paschi’s (MPS) chief executive.

A Chamber of Deputies committee passed the measure early on Wednesday as part of last-minute changes to the 2023 budget.

After failing to clinch a sale of Monte dei Paschi to UniCredit last year, the Treasury in February hired veteran banker Luigi Lovaglio to lead the Tuscan lender.

Lovaglio, who built his career at UniCredit to eventually lead the group’s Polish arm Pekao, in November pulled off a 2.5 billion euro capital raise in stormy markets.

He runs for reappointment in April when Monte dei Paschi’s current board expires.

As a bank that was bailed out by the state in 2017, Monte dei Paschi already applies curbs to executives’ pay.

Under terms agreed with European Union authorities, the total remuneration of any MPS executive may not exceed 10 times the average salary of its employees in 2022.

Lovaglio’s predecessor Guido Bastianini earned 466,250 euros last year, a document on Monte dei Paschi’s website showed.

($1 = 0.9430 euros)