The chief executive of housebuilder Persimmon has defended a widely criticised remuneration scheme that will give him a bonus of more than £100m.
Persimmon’s chairman Nicholas Wrigley, and remuneration committee chairman Jonathan Davie, resigned in December over the pay scheme.
CEO Jeff Fairburn responded yesterday after the company reported a rise in sales, up 9% to £3.42bn, that could help it beat profit expectations for 2017.
Quoted in The Times, Fairburn said his bonus was an “important driver” of the company’s performance, though he would not confirm what his intentions were for the money he is due to receive.
The Financial Times pointed to the influence of the government’s Help-to-Buy scheme on housing sales. The FT quotes Fairburn as saying: “My point on that is that it’s supply and demand, and the demand has been created through the Help-to-Buy scheme.
“Government has stimulated demand, and we—particularly at Persimmon—are looking to meet that demand.”
In December a statement from Persimmon, after the resignation of Wrigley and Davie, said a cap on the bonus should have been introduced: “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.”