Telefónica Group replaces CEO

Surprising change at the top of the Spanish Telefónica Group. In a special meeting convened at short notice on Saturday, the Board of Directors dismissed the previous Executive Director and Chairman of the Board of Directors José María Álvarez-Pallete. The Board appointed 52-year-old Marc Thomas Murtra Millar as his successor.

The decision was made "in view of Telefónica's new shareholder structure and the desire of some important shareholders for a fresh start at the top of the board", the company announced on Saturday evening. Álvarez-Pallete had complied with the request and submitted his resignation. The Board of Directors thanked the outgoing CEO for "the many years of collaboration" and his "exceptional performance and dedication".

"It was a privilege"

"It was a privilege to be part of the big Telefonica family. It was my home and my school," explained Álvarez-Pallete on the X platform (formerly Twitter). "Together we have made the impossible possible. Thank you for every step we took together and thank you for believing in me. Once a Telefónico, always a Telefónico."

The 62-year-old Álvarez-Pallete had been CEO of the former Spanish monopoly since April 2016. When he took office, Telefónica was burdened by a mountain of debt of around 52 billion euros, which Álvarez-Pallete was able to reduce by around half. He also concentrated the international telco giant's business on a few core markets, including Germany. At the end of 2023, the Group bought all shares in Telefónica Deutschland and delisted the German subsidiary from the stock exchange.

However, Álvarez-Pallete was unable to achieve a turnaround in the Telefónica share price. Since 2016, the share price has more than halved and has fluctuated between three and five euros for a few years. Like other network operators in Europe, Telefónica is faced with intense competition and a high need for investment in infrastructure .

Government intervenes

The new boss was apparently installed at the instigation of the Spanish government. The sovereign wealth fund SEPI acquired a ten percent stake in Telefónica last year in order to secure Spanish influence over the company. Saudi Telecom had previously acquired just under ten percent of Telefónica shares. Unlike in Germany, where the state still holds just under 14 percent of Deutsche Telekom, Telefónica was fully privatized between 1995 and 1997.

Marc Murtra was born in England but has Spanish citizenship and studied at the Polytechnic University of Catalonia in Barcelona. He was most recently CEO of the Spanish IT company Indra Sistemas, which develops systems for aviation, defense and e-government, among others. During his career, he has also worked in the public sector and as a political official.

(vbr)