The Government has activated the mechanisms to change the president of Telefónica. This Saturday, the Board of Directors of Telefónica approved the replacement of Jose María Álvarez-Pallete as president of the company by Marc Murtra. The State Society of Industrial Participations (SEPI), which has 10% of the capital of the telecommunications operator, has promoted this movement in the council.
Sources familiar with the operation had assured elDiario.es that Álvarez-Pallete’s dismissal will take effect “shortly” during the holding of a board of directors of the company that will take place this weekend, before they open the stock markets. The successor is Marc Murtra, who currently holds the presidency of Indra since 2021.
The decision to dismiss Álvarez-Pallete as head of Telefónica was communicated to him this Friday by the company’s main shareholders. The same sources assure that the manager will not resist his change and his replacement by Murtra will be carried out in an orderly process.
SEPI reached 10% of Telefónica’s share capital last May 2024. The public entity completed a purchase operation ordered by the Council of Ministers in reaction to the entry of the Saudi telecom company STC into Telefónica last September. STC acquired 9.9% of Telefónica’s share capital – 4.9% in direct shares and 5% in financial derivatives – in an operation valued at 2.1 billion euros.
The reasons for the departure of Álvarez-Pallete from the telecommunications company, who has been president of the operator since April 8, 2016, would be due to the poor performance of the company’s share price on the Stock Exchange, although most European telecommunications companies are having a difficult stock market journey. Despite the recurring profits and the debt reduction by 50%, the Spanish operator’s stock has fallen by 60% since the arrival of José María Álvarez-Pallete as president of the telecommunications company.
When Álvarez-Pallete was appointed president of Telefónica on April 8, 2016, the Spanish operator’s share was worth 9.31 euros. On September 5, 2023, when the STC operation was announced, Telefónica’s share was trading at 3.75 euros. This Friday, January 17, the price closed at 3.97 euros.
The Saudi operator STC is controlled by the sovereign fund Public Investment Fund (PIF), whose president is the crown prince of Saudi Arabia, Mohamed bin Salmán, whom the US blames for the murder of journalist Jamal Khashoggi. Saudi Arabia, like other countries in the Persian Gulf, is following a process of purchases and investments in companies around the world to make its economy less and less dependent on oil revenues. The weakness of Telefónica’s stock has made the Saudis find an opportunity to become the largest shareholder of the Spanish operator for only 2.1 billion euros.
Precisely this operation by the Saudis was the trigger for the Government to decide the entry of the Spanish State, through SEPI, into the capital of the operator, a company that is considered strategic for the interests of Spain. The Government appointed Carlos Ocaña to be the representative of the State on the board of directors of Telefónica. The entry of the public entity was then interpreted as a formula to support Álvarez Pallete, but now it has been the shareholder who hastened his departure.
President of Telefónica since 2016
José María Álvarez-Pallete (Madrid, December 12, 1963) became president of Telefónica in 2016, after the resignation of the company’s controversial director, César Alierta, who died in 2024. When he was appointed by Alierta, Álvarez-Pallete He had already held numerous positions of responsibility in the operator.
When he was appointed president, he had already been at the top management of the company for 17 years, where he joined in 1999 as director of finance of Telefónica Internacional and maintained an ascending career: months later he held the General Directorate of Corporate Finance, in 2002 he was president of Telefónica Internacional and later he was appointed president of Telefónica Latin America. In 2011 he was appointed executive president of Telefónica Europe and a year later he replaced Julio Linares as CEO. Since July 2006 he was a member of the board of directors.
Source: www.eldiario.es
