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Persimmon shareholders revolt over boss's £75m bonus

House builder narrowly escapes defeat in annual general meeting vote on pay package for bosses, with 48.5% of votes cast rejecting the scheme.

 
Persimmon shareholders revolt over boss's £75m bonus
 

House builder Persimmon (PSN) has been hit with a shareholder revolt over the pay plan which will deliver a £75 million bonus to boss Jeff Fairburn.

The FTSE 100 company only narrowly escaped defeat in vote on the scheme, with 48.5% of votes cast opposing the remuneration report.

Among those to vote against the pay plan was Aberdeen Standard Investments, which holds 2.3% of the company's shares.

Persimmon has faced fierce criticism over its pay structure, set up in 2012, which has handed Fairburn more than 4.8 million share options, with the price he would pay for them dependent on the amount paid out to shareholders in dividends under its 10-year plan.

That long-term incentive plan could have landed a bonus of £110 million, but that has been cut to £75 million as the house builder bowed to pressure.

Euan Stirling, head of stewardship at Aberdeen Standard Investments, said that cut 'does not even get close to acceptable'.

'I understand that the executive team at Persimmon have been very successful and are highly regarded in the industry for their technical and managerial expertise. But being a company director, and in particular a chief executive, requires more,' he said.

'It requires a broader context. It requires a personal motivation that goes beyond simply amassing a fortune. It requires an understanding of where the company sits within the society within which it operates.

'Little of that is evident currently at Persimmon.'

Other investors, including Royal London and the Church of England, were expected to vote against the pay scheme.

Persimmon interim chairman Nigel Mill apologised over the pay scheme at the annual general meeting, according to reports.

Previous chairman Nicholas Wrigley quit over the pay furore, as did remuneration committee chairman Jonathan Davie.

16 comments so far. Why not have your say?

Keith Tunstall

Apr 25, 2018 at 17:43

As a small shareholder in Persimmon I was appalled when I discovered the pay scheme and will divest as soon as I can break even on what I paid.

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David J Robertson

Apr 25, 2018 at 17:48

Hello Keith,

Well I have a different view, as A small investor I invested in Persimmon in April 2012 and during the period (to date) I have seen incredible growth. tI would be churlish of me to complain.

ATB

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TJW

Apr 25, 2018 at 18:05

I agree with David. As long as an investment is delivering good results for me, as a shareholder, I am happy that the management team are well rewarded.

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Michael Loveridge

Apr 25, 2018 at 18:05

They only got away with it because so many of us private investors hold through nominee accounts and therefore never receive notice of the AGM or the opportunity to vote.

In the old days of certificated shares, when we received voting cards in the post, I'm sure most of us would have voted against this disgraceful `snouts in the trough' resolution and defeated it.

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James Park

Apr 25, 2018 at 18:14

Why is it that some people are looking for more money all the time. Is it their God?

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Peter in Cornwall

Apr 25, 2018 at 18:33

A prime example of the "unacceptable face of capitalism" which is simply food and drink to Corbyn and his cronies.

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Yasani

Apr 25, 2018 at 18:43

Well put by Michael Loveridge ( 25-4-2018 @18:05 ) - I am in the same boat, namely, holding shares through a nominee account and am left in the dark about the AGM otherwise I would have thrown both my shoes as well the spare ones at the wretch at the AGM and requested for justification for the obscene remuneration package.

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DIY

Apr 25, 2018 at 18:45

Hello James,

I too have a different view. I too am looking for more money all the time. That is why I buy and sometimes sell shares.

Presume you have more effective motivation.

On some of my less successful adventures in the stock market, I did try praying. Did not make any discernible difference to my performance.

Good luck.

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Franco

Apr 25, 2018 at 19:02

indeed greed has no limits. Capitalism, red in tooth and nail.

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Roger Lawson

Apr 25, 2018 at 19:28

This is the kind of behaviour by UK company directors and institutional investors that might well lead to a socialist Government in due course who will have a mandate to deal with this problem in a more vigorous manner than the current Government.

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richard tomkin

Apr 25, 2018 at 22:16

I see Jeff Fairburn's bonus was £75 million : why could he have not settled for say £74 million ? Or was he quite desperate in his financial plight ?

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Paul Hutchings

Apr 25, 2018 at 22:35

“It requires a broader context. It requires a personal motivation that goes beyond simply amassing a fortune. It requires an understanding of where the company sits within the society within which it operates “

I think the Aberdeen chappy nailed itt......enough said !

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Roger Savage

Apr 25, 2018 at 23:38

It is an absolute *disgrace* that house builders are making huge profits off the back of Help to Buy (aka Help to Profit) . If they can afford to pay such bonuses, they can damn well fund their own incentives to flog their overpriced boxes which would otherwise be unaffordable.

Much is said by the government about profiteering by the 'big six' energy companies but at least they don't get billions in public subsidies. This blatant profiteering by house builders off the back of government schemes that are in themselves a 'thank you' for party donations is little more than open corruption quite frankly.

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kirk walton

Apr 28, 2018 at 11:02

I think the last comment sums up the issue, the builders pretending to assist providing houses whilst profiteering through Help to Buy. This is now their main sales achiever and if it was withdrawn would severely damage their future profits. A pity that bonuses, poor builds, high density sites, sites with little infrastructure, worthless warranties and schemes like leasehold sales seem to best describe the news that surround builders.

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Keith Tunstall

Apr 28, 2018 at 18:29

Have they had the decency yet to alter the bonus scheme for the future?

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DIY

Apr 28, 2018 at 18:48

Yes, a total and absolute scandal!

Cannot understand how stupid people are continuing to buy these boxes.

Build your own I say, and keep all the profit out of the grubby hands of these pesky builders.

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