Luigi Gubitosi, former Telecom Italia (TIM) CEO, has stepped down from the company's board.

TIM announced that a severance package was agreed for Gubitosi, at about €6.9 million ($7.8 million), to be settled on January 3. Although Gubitosi quit as CEO after losing the confidence of major shareholder Vivendi and the majority of board members – reported strategic differences amid a succession of profit warnings and a wilting share price eroded support for Gubitosi – he retained his seat on the board.

Figure 1: Going, going: Despite stepping down as CEO, Luigi Gubitosi had hung on to his spot on the board.
(Source: Agnezia Sintesi / Alamy Stock Photo)

The lack of a free board seat was apparently a stumbling block to TIM in naming his successor. Who the next CEO will be is still unclear, however. TIM only said it was continuing the succession planning process aimed at appointing a new CEO and "will complete it as quickly as the circumstances allow."

Headhunter Spencer Stuart, as reported by Reuters, has drawn up a list of possible CEO candidates. One name on the list might be Pietro Labriola, CEO of TIM Brazil, who was appointed general manager of TIM Group last month. Prior to Gubitosi's departure from the board, unnamed sources referenced by Reuters expected Labriola to be named CEO once a board seat became available.

KKR bid under microscope

As part of the announcement on Gubitosi, TIM said it was undergoing a "thorough assessment" of the takeover bid from private equity firm KKR and to delist the company. TIM added, too, that it was weighing up the KKR offer in "comparison with the outlook and a review of other strategic alternatives are under way in order to decide, among other things, whether to give access to the due diligence requested by KKR."

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Gubitosi, when CEO, reportedly criticized TIM directors for stalling on KKR's offer because of shareholder pressure. Vivendi, for example, believes KKR's offer does not adequately value TIM.

The Italian operator indicated that wading through the options might take some time. "This process is complex, and it will take time which, at the moment, is not possible to quantify," it said.

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— Ken Wieland, contributing editor, special to Light Reading