Topics: Board of directors, Non-executive director, Corporate governance Pages: 39 (7667 words) Published: March 11, 2015


Research Report
Corporate Governance

January 2014


Kamilya Dosbayeva
Sebnem Dundar
Edoardo Fasoli
Alessandro Favero
Eleonora Vaccari


Executive Summary1
1. Company Overview3
1.1 Overview of the business3
1.2 Ownership and group structure4
1.3 Firm performance5
2. Di Amato Case: from the CEO Duality to a powerful Chairman6 3. Strategy and Risk Management Processes8
4. Board of Directors11
4.1 Composition and Processes11
4.2 Committees12
4.3 Changes on the Board12
5. Key Issues15
5.1 Board Issues15
5.2 Remuneration of Executive Directors16
5.3 Expropriation – Milking16
6. Proposals19
6.1 Board of Directors19
6.2 Proposals Regarding Transparency19
6.3 Executive Remuneration20
6.4 Tunneling20

1. Executive Summary1
3. Maire Tecnimont is a listed Italian group of companies founded in 2005 by the merger of two key companies in the Italian industry: Fiat Engineering (which was acquired in February 2004 and later became Maire Engineering) and Tecnimont (which was owned by Montedison and acquired in 2005). The Group is present in 28 countries, operating in mainly three areas of business, which are: engineering and construction, technology and licensing, energy and ventures. The Group has gone through initial public offering in Italian Stock Exchange in 2007. Since then, operating companies have been added to the Group. 4. As of December 31, 2012 the Group has a share capital of €16,125,000, composed by 322,500,000 ordinary shares. The Group is controlled by Fabrizio Di Amato, who holds control of the company through Maire Gestioni SpA. 5. The performance of Maire Tecnimont SpA shows a high correlation between the share prices, the projects commissioned and the acquisitions performed. In 2010 the Group suffered a sharp decrease in share price due to the uncertainty arising from the projects in South America. The Group approved the distribution of dividends in 2011 despite of the negative results in terms of profitability and capitalization. 6. The Group’s net income at 30 June 2013 equals to Euro 10 million, a significant increase compared to the loss of 2012, when the net loss was negative and equal to Euro 71.5 million. 7. Fabrizio Di Amato became CEO of Maire Engineering in 2004, and then he became both CEO and Chairman of Maire Tecnimont until 2012. Fabrizio Di Amato was simultaneously major shareholder, CEO and Chairman of the Board of Directors in Maire Tecnimont for the period from 2005 to 2012. 8. Since the Group was subjected to an organizational, financial and strategic restructuring in order to restore Maire Tecnimont’s condition damaged in the financial market by the bad financial position from the end of 2011, the Group decided to assign two different roles to two distinct persons; Di Amato remained the Chairman and Roberto Folgiero was appointed as CEO. 9. Multiple exceptional events of great magnitude occurred simultaneously in Brazil and Chile in 2011 and the former business model, together with the shortcomings, brought the Group close to collapse in 2012. Recently the Group launched a de-risking strategy followed by the motto “more projects with fewer risks”. 10. From 2007, when Maire Tecnimont went public, its Board of Directors has been subject to various changes throughout the years both in its structure and in the role of Directors, even if the number remained almost always unchanged counting on nine Directors. During the period between 2007 and 2010, the Board of Directors was composed by the same people in the same positions, Di Amato being either the CEO or the chairman. In 2013 the Board of Directors of Maire Tecnimont has been subject to major changes due to the financial and corporate restructuring of the corporation. In order to comply with the Code of Good Governance, Di Amato left the position of CEO and retained only that of Chairman of...

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