Italy to seek pay cut for Eni, Enel, Finmeccanica managers

ROME Fri Mar 28, 2014 2:30pm EDT

The logo of oil company Eni-Saipem is pictured at its headquarters in Rome February 8, 2013. REUTERS/Alessandro Bianchi

The logo of oil company Eni-Saipem is pictured at its headquarters in Rome February 8, 2013.

Credit: Reuters/Alessandro Bianchi

ROME (Reuters) - Italy said on Friday it will back cuts of at least 25 percent to top managers' salaries at oil producer Eni (ENI.MI), utility Enel (ENEI.MI) and defense contractor Finmeccanica (SIFI.MI) at coming shareholders' meetings.

All three companies are controlled by the state but listed on the stock market, with government stakeholdings ranging from 30.2 percent in Finmeccanica and 31.2 percent in Enel to 44.3 percent in Eni.

The economy ministry said in a statement its representatives at the shareholder assemblies would vote for the proposals but added the result would depend on a vote by the majority of shareholders.

The proposed cuts were already foreseen in a law passed last year, but do not take effect until April 1, 2014.

Separately, the government also announced compulsory 25 percent cuts in top management pay at rail operator Ferrovie dello Stato FRSTO.UL, Poste Italiane PSTIT.UL, the post office group which is due to be partially privatized, and state investment holding Cassa dei Depositi e Prestiti CDP.UL.

With Italy suffering the highest unemployment seen since the 1970s, Prime Minister Matteo Renzi has vowed to bring down the salaries of Italy's public sector managers.

There will be no absolute management pay limit at any of the companies but the reductions from last year's salaries bolster Renzi's attack on waste and elite privilege.

PAY MUCH HIGHER IN GERMANY

The move could also fuel criticism that the heads of Italian multinationals will earn less than foreign competitors.

Last week, the head of Ferrovie dello Stato, Mauro Moretti drew furious criticism after threatening to walk away from his 850,000 euro ($1.17 million) job, complaining that the head of German rail group Deutsche Bahn earned three times his salary.

According to annual accounts, Fulvio Conti, chief executive of electricity group Enel, earned 2.1 million euros last year. His counterpart at oil group Eni, Paolo Scaroni, earned 6.4 million euros while Finmeccanica chief Alessandro Pansa earned just over 1 million euros.

While those pay levels are not especially high by international standards, the pay of managers at lower level public companies can be very high in comparison with most countries, with some earning more than Italy's president.

Under the new rules, management pay in other public sector companies, including state broadcaster RAI and air traffic controller ENAV, will be measured against the head of the Court of Cassation, Italy's top appeals court, who earns a gross annual salary of 311,658.53 euros.

Managers of the larger groups such as RAI will earn the same salary, while heads of the smaller companies will earn proportionately lower packages based on the size of their operations and workforces.

($1 = 0.7278 euros)

(Reporting by Steve Scherer and James Mackenzie; Editing by Tom Heneghan)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article