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Persimmon chairman quits over boss's £100m bonus

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Persimmon chairman quits over boss's £100m bonus
 

Nicholas Wrigley has quit as chairman of Persimmon (PSN) over his role in the company's incentive structure that is set to hand chief executive Jeff Fairburn a £100 million bonus.

Persimmon announced Wrigley's departure, citing the 2012 long-term incentive plan (LTIP).

Remuneration committee chairman Jonathan Davie is also leaving the business over the payout.

'The board believes that the introduction of the 2012 LTIP has been a significant factor in the company's outstanding performance over this period, led by a strong and talented executive team,' said Persimmon in a statement to the market.

'Nevertheless, Nicholas and Jonathan recognise that the 2012 LTIP could have included a cap. In recognition of this omission, they have therefore tendered their resignations.'

Under the plan, Fairburn has more than 4.8 million in share options in Persimmon. Given the £26.23 share price, once exercised those shares will be worth £127 million.

The price Fairburn will pay for the shares depends on the amount Persimmon has paid out to shareholders in dividends under its 10-year plan, launched in 2012 to deliver £6.20 per share, with higher dividend payments resulting in a lower exercise price.

Persimmon has been running well ahead of schedule in the payment of dividends, with £4.85 already paid out over the last five years.

Fairburn will be able to exercise 40% of his options on New Year's Eve, with the remainder when the £6.20 target is reached.

According to Reuters, Fairburn could net a £100 million profit from his options.

Shares in Persimmon were down 23p this morning on the news. The FTSE 100 rose 13 points, or 0.2%, to 7,462.

Outside the FTSE 100, shares in small cap LED maker Luceco (LUCE) crashed 45% to 128p after the company said profits would be £3.5 million lower than expectations at £13.2 million.

The group said margins had weakened, an issue that had not been identified sooner due to 'an incorrect assessment of the value of the group's stock'. Financial controller Ian Pritchard has resigned as a result.

Joining Luceco at the bottom of the FTSE Small cap index was SDL (SDL), down 24% at 350p after the software firm issued a profit warning due to delays in the closure of a number of deals.

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