News
The new CEO is taking over the company during a major decline in its stock price, with Telefónica’s market value falling by more than half under Álvarez-Pallete’s leadership
After a board meeting in which shareholders expressed the desire for new company leadership, Telefónica’s board has accepted the resignation of CEO José María Álvarez-Pallete.
Marc Murtra, the former president of IT and defence solutions company Indra, has been appointed to succeed Álvarez-Pallete, assuming shareholder approval.
The coup appears to have been politically motivated. Through its state-owned fund SEPI, the Spanish government acquired a 10% stake in Telefónica in 2023, giving it greater influence within the company. This appears likely to have played a central role in the board’s decision to replace Álvarez-Pallete with Murtra. On Friday, Álvarez-Pallete was called into the offices of Prime Minister Pedro Sánchez to be informed of the board’s decision.
Critics, including analyst James Ratzer of NewStreet Research, have raised concerns that Murtra’s appointment, which reportedly at the request of the government, is primarily politically motivated and not in the company’s best interests. Murta notably has “limited telecoms experience”.
Private Telefonica shareholders, such as Caixa (10%) and BBVA (5%), reportedly supported the change, signalling the growing role of government-aligned entities in Telefónica’s operations.
Investors have reacted cautiously, with Telefónica’s shares falling by 3% this morning, amid fears of political interference. Some political figures, like Borja Semper of the opposition People’s Party, have openly condemned the change, calling it an “assault” on Telefónica.
“Leadership is a journey that, like life itself, is made up of countless chapters. The one that is now beginning, I have no doubt, will be full of opportunities that will allow Telefonica to reach new heights and achieve new successes,” said Álvarez-Pallete in a social media post.
Keep up to date with the latest international telecoms news by subscribing to the Total Telecom daily newsletter
Also in the news:
EXA Infrastructure enters into agreement to acquire Aqua Comms
“European competitiveness has one foot in the morgue,” warns Nokia CEO
BT quietly scraps EV charging pilot