Has Giorgetti resolved the French imbalances in StMicroelectronics?
StMicroelectronics is moving towards the reappointment of Chery's CEO. But that's not all: in response to Italian complaints about the semiconductor company's French imbalance, Lorenzo Grandi will join the management board. Have Italy-France tensions been overcome? Here are all the details
The supervisory board of STMicroelectronics, the Italian-French controlled semiconductor company, today made official the re-nomination of Jean-Marc Chery to the role of CEO for the next three years. Lorenzo Grandi – the current financial director – was also proposed to the management board of the company, again for a period of three years. The appointments will be made official during the shareholders' meeting on May 22nd.
STMicroelectronics' largest shareholder, with 27.5 percent, is STMicroelectronics Holding; the holding is split halfway between the Italian Ministry of Economy and FT1C1, which belongs to the French state bank Bpifrance.
ITALY-FRANCE TENSIONS
Grandi's appointment and the confirmation of the proposal to renew Chery's mandate come after weeks of journalistic rumors on tensions between Italy and France regarding the leadership of STMicroelectronics, which operates in a sensitive sector such as semiconductors.
Giorgia Meloni's government would like greater investments from the company in Italy rather than in France, and it also seems not to have appreciated the reorganization wanted by Chery, which reduced the number of internal divisions and eliminated the unit headed by Marco Monti – called Automotive and Discrete Product -, composed mainly of Italians. The move seems to have strengthened, in Rome, the perception that STMicroelectronics' decision-making system has ended up more firmly in French hands: for this reason, Bloomberg had written that Palazzo Chigi was against Chery's reconfirmation.
STMicroelectronics had defined these reconstructions as "pure speculation".
DOES GRANDI REBALANCE THE ITALIAN PRESENCE IN STMICROELECTRONICS?
Lorenzo Grandi's proposal for the management board of STMicroelectronics could make it possible to smooth out the tensions between Rome and Paris and rebalance the Italian and French presence at the top of the company.
Ansa writes, citing sources close to the government, that the Minister of Economy Giancarlo Giorgetti has "worked" on the rebalancing of STMicroelectronics through Grandi's entry into the board . The agency also writes that at the May meeting "a structural innovation in the governance of the company will be examined: no longer a sole director but a second figure in the person of Lorenzo Grandi".
DIVIDEND RISE FOR 2024
The loss on the stock market of STMicroelectronics had made headlines on Tuesday, falling by around 1 percent on the stock market after a steeper loss – of 6.9 percent – between 12 and 18 March. Among the causes, the dividend distributed on March 18 was reported (a quarterly coupon of $0.06, representing the fourth part of the 2023 dividend of $0.24 in total).
The dividend that will be distributed between the second quarter of 2024 and the first of 2025 – and which will be voted on at the May meeting – will be higher, at $0.36 per share.
THE OFFICIAL STATEMENTS
In the STMicroelectronics documents we read that the decision to propose Chery's reappointment was taken "on the basis of his specific skills necessary to adequately carry out the role of member of the management committee", but also taking into account "his performance" as CEO.
EQUITY'S COMMENT
“Given the work carried out in recent years, we believe that the reconfirmation of Chery as CEO is positive for the company and we believe that decisions on investments (geographical mix) are mainly linked to the level of public subsidies that countries provide on specific projects and to the maintenance of an adequate supply chain and not for other reasons, as recently suggested by the press", declared Equita analysts.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/stmicroelectronics-conferma-ceo-chery/ on Fri, 22 Mar 2024 15:19:15 +0000.