Policymakers believe that investment institutions can be persuaded to take a greater role in corporate governance. But do they really possess the willingness and capacity to embrace their stewardship role?
In January 2018, Jeff Fairburn, CEO of FTSE 100 housebuilder Persimmon, was awarded a total annual remuneration package of £100m. This was an eye-watering pay award, and was based on the approval of a long-term incentive scheme in 2011 by both the board of Persimmon and most of its major shareholders.
However, the real context was that much of Mr Fairburn’s recent success in boosting corporate earnings had apparently arisen as a consequence of the serendipitous launch of a government-subsidised scheme (Help-to-Buy), aimed at boosting UK housebuilding, which gifted a big boost to the sector’s profit margins.
As a result, an award of abs
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