Spain's telecommunications giant Telefonica announced on Saturday that it had replaced its CEO, in a surprise move prompted by pressure from major shareholders.
An emergency meeting of the company's board elected Catalan businessperson Marc Murtra to replace Jose Maria Alvarez-Pallete, it said in a statement.
The company said the decision was taken "in view of Telefonica's new shareholding structure and that some of its relevant shareholders have expressed the convenience of embarking on a new stage in the executive chairmanship."
The online newspaper El Confidencial first reported on Alvarez-Pallete's likely departure on Saturday morning. Sources close to the operation confirmed it to Agence France-Presse (AFP) before the company issued an official statement.
El Pais reported that the SEPI state holding company, which recently took a 10% stake in Telefonica, had pushed for Alvarez-Pallete to be replaced by Murtra, currently head of the Spanish tech consulting group Indra.
Spanish media reports say Murtra is close to the center-left government of Prime Minister Pedro Sanchez.
Alvarez-Pallete, who has headed Telefonica since April 2016, will receive a 23-million-euro ($23.7 million) severance package.
Telefonica, which has operations in nine Latin American countries, has been turbulent since Saudi group STC took a 9.9% stake in September 2023.
That led the Spanish state to re-enter the group's capital through SEPI to defend its "strategic" role of providing services to the country's armed forces.
Spanish banking group La Caixa also raised its stake to 9.9%.
Spain's largest UGT union, one of the country's largest, expressed concerns about the management change. It hoped "that SEPI would clarify the motives and purpose of the changes in the presidency," it said in a statement.
Telefonica has been facing increased competition in its home market following the recent merger of Orange and MasMovil, and the sale of Vodafone Espana to British investment fund Zegona.
Last year, Telefonica announced it would be cutting 3,400 of the 16,500 jobs in Spain.
