It’s a revolt! City advisers lead backlash at Mr £131m

PERSIMMON faces a shareholder revolt over fat- cat pay after its boss was dubbed ‘Mr £131m’ for the potential size of his bonus.

Advisory group Glass Lewis said investors should vote against the housebuilder’s remuneration report at the annual general meeting on April 25.

And a leading fund manager with a stake in Persimmon said shareholders could vote against the reappointment of directors – including chief executive Jeff Fairburn.

‘I haven’t heard of anyone who wants to see him go but voting against the remuneration report will not be enough,’ the investor told the Financial Times.

‘There is a level of upset over the way the executive team have reacted to shareholder concerns. It has undermined our confidence in the leadership.’

Persimmon has faced a barrage of criticism over a long-term incentive plan agreed in 2012 that would have seen around 130 managers share a windfall of close to £800m.

At one point Fairburn, 51, was on course to receive £131m, making him one of the highest paid executives in corporate history.

The row led to the shock resignation of chairman Nicholas Wrigley late last year.

Fairburn has since agreed to give up 30pc of his total payout and hand a ‘substantial proportion’ of his windfall to charity.

But the married father of three was still paid £47.1m in 2017 while his two sidekicks earned a further £57.1m – taking the total handed to the firm’s top three executives to more than £104m last year. The pay packets included £99m of shares as they received the first tranche of the controversial incentive plan

The trio – including finance director Mike Killoran, 56, and managing director Dave Jenkinson, 50 – are set for a further windfall worth tens of millions of pounds this year when the second tranche of the bonus is handed over.

Campaigners have branded the payouts ‘absolutely shocking’ at a time of mounting concern over the chronic shortage of good quality housing in the UK. And critics said the bonus pot has been swollen by the Government’s Help to Buy mortgage scheme that has funnelled taxpayers’ cash into the housing market – boosting builders’ profits and bonuses.

Persimmon has sold 21,533 homes through the initiative since it was launched in 2013 – with the taxpayer providing loans of £943m to the buyers of these properties.

Glass Lewis, whose recommendations are widely used by investors, said it could not support the remuneration report given the ‘substantial payouts’ for senior management.

‘While we acknowledge the positive steps undertaken in an effort to limit the amounts payable to each executive and the committee’s responsiveness to shareholder concerns, we note that all three executives will still receive what we consider to be excessive payouts,’ it said. Persimmon sold 16,043 newly built homes last year at an average price of £213,321. It made profits of £977.1m on the back of revenues of £3.4bn.

The company appointed a chairman last month as it sought to restore is battered reputation following the row over fat cat pay.

Boardroom veteran Roger Devlin, a City heavyweight and an independent director of the Football Association, will join at the start of June.

A Persimmon insider has said the company is ‘working flat out to put this row behind it and get the focus back on the performance of the business’.