A huge bonus for Persimmon chief executive Jeff Fairburn has been lambasted by the chairman of rival housebuilder Redrow.
Steve Morgan said that Persimmon’s £110m bonus scheme, of which CEO Jeff Fairburn became eligible to scoop £45m last month, was “very, very wrong”.
Speaking to the Evening Standard, Redrow chairman Morgan said the payout and subsequent claims of greediness in the housebuilding industry “sticks in the craw”.
“I’m sick to the teeth of seeing the headlines of greedy housebuilders. It’s not true and they are doing the whole of the industry a complete disservice,” Morgan said. If he had been chairman of Persimmon, “it wouldn’t have happened”, and the bonus scheme should have been capped, he added.
Nicholas Wrigley quit as Persimmon chairman in December 2017, along with remuneration committee head Jonathan Davie, after admitting that the remuneration plan set out in 2012 should have been capped.
“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,” the company stated to the stock exchange in December. “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.”
A recent survey by Vlerick Business School found that UK CEOs were paid 94 times the income of their average employee, with the Netherlands coming in at 71, and 40 in Sweden. Remuneration has climbed due to bonus payouts, it found.