Vittorio Mincato
1936–

Chief executive officer, Eni

Nationality: Italian.

Born: 1936, in Torrebelvicino, Italy.

Career: Eni, 1957–1977, various positions, eventually became director of administration and finance for Lanerossi; 1977–1984, director of administration; 1984–1988, assistant to the chairman; 1989–1990, director of human resources; 1990–1993, chairman and CEO of Savio and chairman of Enichem Agricoltura; 1993–1995, deputy chairman and CEO of Enichem; 1996–1998, chairman of Enichem; 1998–, CEO.

Address: Eni, Piazzale Enrico Mattei 1, 00144 Rome, Italy; http://www.eni.it.

■ An accountant by training, Vittorio Mincato spent his entire professional career at the Italian oil and gas company Eni. After 40 years of rising through Eni's ranks he had given up any hope of ever reaching the top spot; then in 1998 he was finally selected to be the CEO. Mincato succeeded without the support of the political establishment, a rarity in Italian business.

EARLY CAREER

Mincato was born in 1936 in Torrebelvicino, Italy. In 1957 he began his long career with the oil and gas firm Eni. Until 1977 Mincato worked for Lanerossi, Eni's textile division, eventually rising to the position of director of administration and finance. He returned to the parent company in 1977 to serve as director of administration; from 1984 until 1988 he served as assistant to the chairman. Mincato moved to the post of director of human resources in 1989, then from 1990 to 1993 served as the chairman and CEO of Eni's textile-machinery company Savio; at the same time he served as the chairman of Enichem Agricoltura, Eni's fertilizer subsidiary. Mincato helped to privatize both Savio and Enichem Agricoltura. From 1993 to 1995 he held the position of deputy chairman and CEO of Enichem, Eni's petrochemical subsidiary. Then from 1996 to 1998 Minato was chairman of Enichem, where he focused on restructuring and privatization.

BECOMES CEO AT ENI

In November 1998, when the former chief executive Franco Bernabe left the company to become the CEO at Telecom Italia, Mincato became CEO at Eni. Some believed that the company should have brought in an outsider to fill the vacancy, but fears of provoking internal strife by doing so led to the selection of the longtime Eni employee Mincato. He took over at a particularly difficult time for the company: international oil prices were low, and the looming liberalization of the Italian gas market further threatened profits.

After taking over as CEO, Mincato made clear that he would strictly apply the company's statutes giving all executive power to the chief executive, which attitude was occasionally the source of tension. Soon after Mincato became CEO, a power struggle developed between him and the Eni chairman Renato Ruggiero. As the former director-general of the World Trade Organization, Ruggiero wanted to take on a more active role in running the company and threatened to step down if he was not given broader authority. Yet Mincato was not willing to cede any of his CEO powers, which were outlined in the company statutes. The board of directors stepped in with a compromise in which the CEO would retain overall management powers but the chairman would be given a role in the company's international activities; Ruggiero proved unwilling to accept the compromise for long, resigning in September 1999. Mincato explained the situation to the Financial Times : "I did not launch a war to defend my position. At the end of the day the statutes clearly established there was only one CEO" (October 12, 1999). He added that the conflict never became personal.

Mincato's struggles continued into 2000, when the Italian government, which had been trying to assert greater influence over the country's leading companies, attempted to force Mincato to resign. The government still owned 35 percent of Eni and thus wielded a certain degree of leverage within the firm; authorities hoped to give more powers to the new chairman Gianmaria Gros-Pietro. In fact, as Mincato had resisted state interference with Eni's operations the government was seeking to replace him entirely with someone less independent. State officials eventually went as far as to attempt to change the company's statutes in April 2000 in order to give more management powers to the chairman. Mincato indicated that if the government altered the statutes, he would resign; Eni's board of directors rejected the proposed changes, however, and Mincato remained on as CEO.

Upon becoming CEO, Mincato had fully outlined his plan for the company. First, he resolved to refocus Eni on its core oil and gas activities while divesting the company of certain other activities. Second, he wanted the company to focus on growth, especially through alliances and joint ventures. Third, Mincato promised to deal with the liberalization of the domestic gas market. The company had once held a near monopoly over the Italian gas market, but government deregulation had ended that situation; Mincato hoped to make up for lost profits by selling gas abroad to countries such as Croatia and Greece. Finally, he planned to expand into the electricity market. Mincato informed the Financial Times, "Our interest is based on the possibility of a gas company becoming integrated downstream into power generation to stabilize or increase sales and revenues in the short term" (October 12, 1999).

EXPANSION PLANS

In spite of his initial plans Mincato came to acquire a reputation for not being interested in international expansion. He informed the Financial Times that he was, in fact, keen on such expansion, but observed that he was nevertheless "often depicted as a domestic animal, a defender of national borders" (October 12, 1999). He went on to say that such portrayals were simply not true, pointing to a chemical alliance he had helped forge with Union Carbide in 1995. Mincato also claimed that he began talks with the French company Elf Aquitaine, though a merger never occurred. Mincato did admit to the Financial Times that he believed Eni needed to grow before it could successfully expand beyond Italy's borders. He stated, "Our weakness is our size and our priority is to grow. The fastest way is through acquisition and we have ample financial means to do so" (October 12, 1999).

In 2000 Mincato thought he had found a suitable acquisition: Eni attempted to buy the midsized British oil company Enterprise, at first outbidding Amerada Hess. Mincato commented in the Financial Times, "Eni has never before undertaken an operation of this size" (December 22, 2000). Minato worked for months on a friendly merger offer in an attempt to convince shareholders to accept the bid. The purchase of Enterprise would have given Eni a presence in both the North Sea and North Africa; the company also would have acquired reserves in Indonesia and Venezuela. However, by 2002 the merger attempt had failed. Another major defeat for Mincato came when the Saudi company Sabic called off talks to buy Eni's petrochemicals division. The Saudis had been concerned about the large investments that would have been required in order to fully comply with environmental laws.

The Italian government criticized Mincato for being too cautious. With his mandate set to expire in May 2002, some state officials wanted to seize the opportunity to remove him from the CEO position. Rumors surfaced that Mincato would be transferred to the chairman's position, thus absolving him of most of his power. One analyst informed the Financial Times, "Eni was prudent not to overpay for Enterprise and the Sabic deal was not easy to bring off, but the combination reinforces the view that Mr. Mincato might be made chairman in order to bring in new management" (April 18, 2002).

Officials wanted Eni to be involved in the deals being made by the world's biggest oil companies. Also the government was displeased that the proposed deal with the French company Elf Aquitaine never materialized. Nevertheless Minato felt that an immediate megamerger was not in Eni's best interests. He told the Financial Times, "Megamergers were above all guided by a defensive logic. They have been looked upon essentially as a means of further reducing costs while gaining economies of scale. But they also incur costs which are often high. First and foremost is the cost of eventual cultural clashes, which are the main reason for such ventures to fail" (May 28, 2001).

To sidestep such clashes of corporate culture, Mincato looked throughout Europe, avoiding the United States; Eni proceeded to purchase the relatively small British Borneo and Lasmo companies. Of those acquisitions Mincato told the Financial Times, "We had never before bought foreign companies and the result has already helped internationalize our own culture" (May 28, 2001). A concrete example of that internationalization was the hiring of the Irishman Hugh O'Donnel as the head of Saipem, Eni's oil-services subsidiary, marking the first time a non-Italian had held such a high-ranking post in the company. To further the company's global interests Mincato bought reserves around the world, including in Iran and Russia.

MUSIC, NOT POLITICS

As was witnessed in a few of his struggles, Mincato preferred not to combine politics with business. He remarked in the Financial Times, "Politics and industry do not mix well" (May 28, 2001). Although Eni's headquarters were located in Rome, Mincato spent much of his time in Milan in order to stay clear of the political wrangling in the capital city. Mincato also spent a significant amount of time in Milan because he was a music lover and enjoyed frequenting the city's famous La Scala opera house. He enjoyed reading musical scores, and his favorite composer was Wagner.

See also entry on ENI S.p.A. in International Directory of Company Histories.