Luxottica has appointed Francesco Milleri to the board of directors with the task of assisting Leonardo Del Vecchio, executive chairman of the group, in “carrying out the various functions associated with his current role.” An Italian business daily, Il Sole 24 Ore, said that Milleri is already an acting deputy chairman, a position that the newspaper believes will be made official at a later stage.
Milleri is a computer expert, born in 1959, who has worked as a consultant for Luxottica and other Italian multi-nationals. He has been described as a long-time friend and adviser of Del Vecchio and his family (see Eyewear Intelligence Vol. 17 N° 3). According to Reuters, he has been playing an increasing active role at Luxottica in the past two years, antagonizing some key executives.
Milleri's appointment raises further concern about the group's governance after a year and a half of top management changes. Del Vecchio, who founded the company that he controls together with his family, will turn 81 on May 22, and he continues to command respect for his accomplishments and his vision. He said that he plans to return to his previous role of non-executive chairman “in a few years,” handing over the management then to a new chief executive.
Del Vecchio came back to the fore in September 2014, pushing out the former CEO, Andrea Guerra, who had run the company for 10 years, and leading to the departure of his newly named successor, Enrico Cavatorta, after six weeks in the post. He then set up a triumvirate formed by two CEOs and an executive chairman, i.e. himself. One of the two CEOs, Adil Mehboob-Khan, was placed in charge of markets, but left on Jan. 29. The other CEO, Massimo Vian, was given responsibility for product and operations.
Insisting that Milleri is not a CEO, and that he will “act under my coordination and under my responsibility,” Del Vecchio defended himself in a statement saying that the group's corporate governance is “very clear” now. Nevertheless, on March 10, Standard Ethics downgraded Luxottica's corporate governance rating to “E+” from “EE-,” with a stable outlook.
Luxottica's governance rating had been placed under monitoring since July 24. Standard Ethics cited comments released by Del Vecchio saying that he was taking on operating powers to give a more active contribution to the management and that the majority shareholder has every right to do so. “The decision prefigures a direct participation of the majority shareholder in the day-to-day management of the company, which, according to Standard Ethics' model, is incompatible with the principle of independence of the board of directors in listed companies,” it said.
In the meantime, Del Vecchio has raised his stake in Luxottica. On March 2, his family holding company, Delfin, spent nearly €78 million to buy 1.51 million shares in the eyewear company, boosting its stake to close to 62 percent.
While he shares control of Luxottica with his family, Forbes has found that Del Vecchio is the richest man in the Italian fashion sector, with a net worth of $18.6 billion. As of March 29, he took the 37th spot on Forbes' list of the world's biggest billionaires.
For its part, Luxottica's board has proposed a plan to buy back 10 million ordinary shares, or 2.07 percent of its capital, for a maximum outlay of €750 million. It intends to use the shares to build up a portfolio of treasury shares to use as currency for extraordinary financial transactions and to cover a share allotment program for the management. The share buyback has to be approved by shareholders at the company's annual meeting on April 29.