Borja Prado leaves Endesa after ten years with more than 12 million settlement

Borja Prado leaves Endesa after ten years with more than 12 million settlement

The "lack of harmony" with Enel, the main shareholder of the power company, leads him to abandon the presidency after an agreement, while José Bogas will remain as CEO

  The president of Endesa, Borja Prado, will leave office next April, after the majority shareholder of the power company, the Italian firm Enel, has decided to relieve him after a period in which the divergences between both parties have intensified until the agreement they have reached peacefully to resolve the situation. The dismissal has been caused by the "lack of business harmony" between the corporation, whose major decisions are made in Milan, and its president, with an office in Madrid.

  In a relevant event referred to the CNMV, Enel explained that it takes this decision in what it considers to be a need to limit the periods in the company's presidency, as in Italy. Prado will thus fulfill a decade at the head of the corporation plus another two years as a counselor of the firm.

Enel explained that he will propose to the board of directors the "adaptation of the internal regulations to the limitation for reasons of good corporate governance". In addition, it alleges that it does so "following criteria of transparency". The power company of Italian origin owns 70.10% of the ownership of Endesa and, therefore, the one that has the power to control all business decisions and corporate reasons related to Endesa.

The departure of Borja Prado will have to be proposed by the board of directors that the firm will hold on March 11, when it foresees the meeting of shareholders of the corporation, which will take place on April 12 in Madrid. In that act, the shareholders will validate the change in the chairmanship and the corresponding changes in the board.

At the 2015 meeting, Endesa renewed the position of Prado, who, four years later, left the firm with compensation that could exceed 12 million euros. This figure would be the result of applying the remuneration policy set by the company in which it fixes 2.8 times its last annual salary plus another variable of 0.95 times the annual compensation for a non-compete agreement for two years. In any case, the agreement between both parties could increase these amounts. Prado's remuneration in 2017 -the last available in the CNMV's registries- was 3.18 million euros , 4.2% higher than the previous year. In addition, it accumulated another 2.29 million euros in its Endesa pension plan .

The abandonment of the presidency will mean the election of a new position, of which the name is still unknown, although it would not have executive functions in the leadership of Endesa. Because they would fall exclusively to the CEO, José Bogas, who will remain in office . Some sources of the sector point to the former president of the CEOE, Juan Rosell, as the future president, although it is an extreme that for now they discard officially.

The decade of Prado at the head of Endesa was dominated by the control that Enel has exercised over the company, becoming a subsidiary in which the annual distribution of dividends has been relevant. Borja Prado became president in 2009 after Acciona sold its 25% of shares to Enel and the Italian group took control of 92% of the company, for a few years after selling 22% of the capital and remaining with 70% current.

That was the result of the controversial 'Opa to Endesa', which began in 2005 when Gas Natural launched its bid for the electric company. Then, in February 2006, the German E.On would do it in a contraopa that started a total war to seize the energy company that had been privatized in the 90s. Later, the landing of Acciona and Enel would drag the gas Natural Gas in the middle of a political, judicial and business conflict that took the price of the action of Endesa up to 40 euros per title; when Prado agreed to the presidency he was quoting around 21 euros; this morning it is paid at 21.6 euros.

On a business-related level, Enel has been limiting any Endesa expansion strategy. In 2015, the Italian firm absorbed and took direct control of the electricity business in Latin America . Endesa only generates business in Spain and Portugal, mainly through the generation, distribution and commercialization of electricity and gas. Now, Enel