26 Apr Persimmon Anger Shareholders Over Excessive Pay
Pay packages for top executives is back under scrutiny, now towards one of Britain’s Biggest Housebuilders, Persimmon Homes.
This is due to the outcome of their annual meeting in York this week where they passed a remuneration package for their bosses. This results in their Chief Executive obtaining an enormous £75 million bonus. This “grossly excessive pay”, said Aberdeen Standard Investments, was narrowly passed with only 36% of their investors voting in favour. The reason the pay policy was approved was due to a third of the shareholders abstaining and, of those who voted, 51.5% were in favour.
It has been revealed that this is the result of a long-term incentive scheme approved back in 2012 by Shareholders, however as the plan had no cap, bonus’ have become excessive due to the company’s enormous success in recent years. An announcement in November 2017 confirmed Persimmon’s top 140 Senior Managers would be rewarded a total of £800 million in shares. Persimmon Chief Executive, Jeff Fairburn, has cut his total to £75 million from the expected £110 million he was to receive, has forfeited his bonus for 2019 and vowed not to vest the rest of his shares until 2021.
Euan Stirling, Head of Stewardship at Aberdeen one of the largest shareholders with a 2.3% stake in the company, said Mr Fairburn’s cut in pay “does not even get close to acceptable” and that Persimmon’s name has been “tarnished” for paying “such excessive amounts”.