The glass maker Pilkington was dealt a serious blow yesterday when it was announced that Paolo Scaroni was quitting as chief executive after being offered another job by the Prime Minister of Italy.
Mr Scaroni, who has led Pilkington for five years, is to become head of Enel, the Italian electricity giant. Pilkington shares fell 5.5 per cent on the news because Mr Scaroni has been widely credited with leading a rescue of Pilkington.
The announcement of his departure to the UK stock market came a day after it had already been announced in Italy that he was joining Enel. The news was not released in London until 8.15am yesterday, well after the stock market had opened, because of a computer problem.
Mr Scaroni, 55, will remain non-executive deputy chairman of Pilkington and retain his shares in the company. He will be replaced as chief executive by Stuart Chambers, who joined Pilkington in 1996 and is currently president of the group's building products worldwide division.
Mr Scaroni was telephoned on Sunday by Silvio Berlusconi, the Italian Prime Minister, who offered him the job at the part state-owned giant. Commenting on his decision yesterday, Mr Scaroni said: "Only an opportunity of this scale would persuade me to relinquish my position as Pilkington group chief executive. I think this is a great opportunity."
Asked how he felt to be returning to his native Italy he said: "This is not necessarily a plus. Of course, I'm Italian, it means more to me than others. But the big thing is the challenge, not the geography. I've enjoyed the last five years tremendously. There's always a little sorrow about change. But life is about change."
Sir Nigel Rudd, the chairman, said Pilkington had intended to reveal his succession plans in September. "Paolo was going to replace me as non-executive chairman and Stuart was going to be chief executive sometime next year. It's a blow because it has come a year early and I can't say I'm delighted about it. But we were planning for it."
Separately, Pilkington said Warren Knowlton was leaving the group after this job as head of the group's automotive division ceased to exist as a result of the latest restructuring. He was on a two-year contract and will receive a £1.8m pay-off.
Mr Scaroni takes charge of Enel as the utility faces increased competition in its main business of generating and selling electricity. He replaces Franco Tato, 69, who became chief executive in 1996.
Mr Scaroni's record will be tough to match, analysts said. He has cut 10,000 jobs during his tenure as part of a massive restructuring designed to cut costs.
Profits have grown but the shares have remained under pressure. News of Mr Scaroni's departure was "a bit of a disaster" Mike Betts, an analyst at JP Morgan, said. "Although I'm sure Stuart will be able, we haven't had that much exposure to him."
David Taylor, at Teather & Greenwood, said the news could "scarcely be viewed as positive since [Mr Scaroni's] contribution to turning Pilkington round has been immense."
After starting his career at consultancy McKinsey & Co, Mr Scaroni worked for 12 years at Saint-Gobain, Pilkington's biggest rival, in Italy.Reuse content