The board of directors of Monte dei Paschi di Siena has stripped Luigi Lovaglio of his executive powers and suspended him from his role as general director with immediate effect, following three days of meetings. The banker remains on the board but without authority, pending the shareholders’ assembly on April 15 that will renew the bank’s governance. The immediate cause was his decision to stand as chief executive candidate on the rival list put forward by Plt Holding, the vehicle of the Tortora family — a move the board, chaired by Nicola Maione, deemed incompatible with his continued operational role. His powers pass on an interim basis to deputy director Maurizio Baj.

At the same time, the board resolved its other outstanding question: the sole candidate to lead the bank going forward is Fabrizio Palermo, currently chief executive of Acea, selected at the end of a process that narrowed an initial shortlist of three — which had also included Corrado Passera and Carlo Vivaldi — down to a single name. Palermo, a 55-year-old from Perugia, built his career across Morgan Stanley, McKinsey, Fincantieri and Cassa Depositi e Prestiti, where he served as chief executive from 2018 to 2022. Since 2025 he has sat on the Generali board as a representative of the Caltagirone group, which holds 11% of Mps and is the most influential private shareholder backing his candidacy.

One significant question remains open: the European Central Bank has explicitly requested that whoever leads the new entity should have substantial hands-on banking experience. Palermo has never run a credit institution in the strict sense. The ECB’s supervisory arm is watching the governance transition closely. Meanwhile, the proxy fight is already underway, with institutional investors — accounting for roughly 50% of the share capital — being courted by the advisory teams behind both competing lists. The shareholder vote on April 15 will determine who leads a Monte dei Paschi that must now absorb Mediobanca through incorporation. The stakes reach well beyond Siena.