MILAN (Reuters) - Leading investment advisers have recommended that shareholders in Telecom Italia (BIT:TLIT) (TIM) back the proposal by the company's outgoing board to give CEO Pietro Labriola another term.
In reports issued on Monday by Institutional Shareholder Services (ISS) and Glass Lewis ahead of an April 23 general meeting, the two proxy advisers urged shareholders to support the slate of board nominees put forward by the outgoing board.
Glass Lewis and ISS also recommended backing the outgoing board's proposal to reduce the directors to nine from 15.
The vote on the board renewal comes at a crunch phase for the ailing former phone monopoly, which is seeking a revamp centred on the sale of its domestic fixed-line access to U.S. fund KKR.
The reappointment of Labriola has been challenged by minority shareholder Merlyn Partners, which proposed an alternative slate of candidates, including former TIM deputy general manager Stefano Siragusa as CEO.
The proxy adviser reports are a boost for Labriola, who has come under pressure following a record stock plunge last month after he unveiled the financial outlook for the business emerging from the network sale.
Worth up to 22 billion euros ($23.89 billion) and backed by the Italian government, the deal is aimed at slashing TIM's debt pile and shifting more than half of TIM's domestic staff on to the network business.
It has been criticised by TIM's top investor Vivendi (EPA:VIV), which has questioned the sustainability of the business left behind, and challenged the sale in court.
Vivendi, which left TIM's board last year after a round of fruitless negotiations with the government on the future of TIM, could obstruct Labriola's reappointment if it decides to back Merlyn's slate.
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