Persimmon boss rejects chance to keep his job
OUSTED Persimmon boss Jeff Fairburn turned down a final chance to save his job by handing back a bigger chunk of his controversial £75m bonus, The
Daily Telegraph understands.
A large proportion of the bonus has vested but cannot be cashed in until 2021. Mr Fairburn was offered the chance to forgo some. He declined.
The York-based housebuilder revealed yesterday it had asked Mr Fairburn to leave following mounting criticism of his record-beating package, which it described as a “distraction”.
Last year it was revealed he would receive a £110m package because of the board’s failure to place a cap on its long-term incentive scheme (LTIP), linked to Persimmon’s share price.
He initially rejected suggestions that he should forfeit any of his bonus, before agreeing to give away an undisclosed sum to charity and accepting a reduced £75m payout in February.
While about a third of that has already been cashed in, The Telegraph understands Mr Fairburn had been offered a chance to stay if he agreed to forgo a portion of the £50m of the bonus yet to be exercised.
Persimmon confirmed Mr Fairburn would keep a set of “restricted” shares that will vest in 2021. But he will have a reduced notice period of two months, meaning it does not have to pay his salary for another full year. Roger Devlin, Persimmon’s chairman, said: “Given the continuing distraction around the scale of his remuneration resulting from the 2012 LTIP, the board believes that it is now necessary for there to be to be a change of leadership.”
He said since Mr Fairburn took charge in 2013, the company nearly doubled its market capitalisation from £3.4bn to £7.5bn.
Mr Fairburn said: “I had hoped that revealing my plans to create a charitable trust and to waive a proportion of the award would enable the company to put the issue of the 2012 LTIP behind it. However, this has not been the case and so it is clearly now in the best interests of Persimmon that I should step down.”
David Jenkinson, a Persimmon veteran and group managing director, will be interim chief executive.
Toby Belsom, of campaign group ShareAction, said: “Institutional shareholders were asleep at the wheel when they approved this scheme. If they are to avoid similar instances, they need to improve transparency on voting practices and become more rebellious.”
Separately, Persimmon announced a strong third-quarter trading update, reporting sales 3pc ahead of the previous year. The company has now sold all of its stock for 2018 and booked £987m of forward sales, 9pc ahead of where it was at this point in 2017.