Row over ‘obscene’ executive pay at house builder Persimmon
Senior figures at the house building giant Persimmon are quitting following revelations of excessive executive pay including a £100m pay out to the company’s chief executive.
The company chairman, former banker Nicholas Wrigley, and the chair of its executive remuneration Jonathan Davie quit after they admitted they had not properly capped executive pay-outs and drew rebukes from MPs for “obscene” rewards.
It arises from a long-term incentive plan introduced in 2012 that could see 140 managers divvy £800m with the three most senior executives receiving £232m: Jeff Fairburn, chief executive of Persimmon, is set to receive £107m, while Mike Killoran, chief financial officer, will receive £84m.
Fairburn will collect the first £50m worth of bonus shares on 31 December.
The house builder’s shares climbed from about 657p when the scheme was approved to £26.29.
Persimmon admitted that the generous pay out plan presided over by the duo “could have included a cap”.
It said: “The company introduced a long-term incentive plan in 2012 (2012 LTIP).
“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.
“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.”
Founded in 1972 by Life President Duncan Davidson, and with headquarters in historic York, the Group is made up of a network of 28 regional operating businesses.
Persimmon has benefited from a combination of extremely low mortgage rates and the introduction by chancellor George Osborne in 2013 of the UK government’s Help to Buy scheme to get more people on the housing ladder and boost house building.
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