The government is preparing to set a maximum ceiling of 240,000 euros on the annual salary of high-level executives hired from 2023 on the boards of banks saved by the state. The first thought is of Monte dei Paschi di Siena of which Rome owns 64% after saving it in 2017.
A commission in the Chamber of Deputies approved the measure as part of last-minute changes to the 2023 budget. After a failed sale of Monte dei Paschi to UniCredit last year, the Treasury hired Luigi Lovaglio in February to lead the Sienese bank .
Lovaglio, a well-respected executive who built his career at UniCredit to lead the group’s Polish arm, completed a €2.5 billion capital raising in November. Lovaglio personally invested €200,000 in the new Monte dei Paschi share issue, which was in danger of failing given investors’ reluctance to invest in a scandal-tainted bank against the backdrop of war in Ukraine, rampant inflation and expected recession in Europe .
Lovaglio is a candidate for reconfirmation in April, when the current board of directors of Monte dei Paschi will expire. As a bailed-out bank, Monte dei Paschi already applies caps on executive pay, and Lovaglio’s fixed salary amounts to €466,000 a year, with no variable pay. By comparison, the head of another medium-sized Italian bank, Banco BPM, earned 2.3 million euros last year. According to the conditions agreed by Italy with the European Union authorities, MPS executives cannot earn more than 10 times the average salary of employees.