Haul building firm bosses in front of MPs, says Cable
HOUSEBUILDING bosses including Persimmon’s Jeff Fairburn could be hauled in front of MPs to explain their multi-million pound bonuses.
Liberal Democrat leader Sir Vince Cable has written to Nicky Morgan, chairwoman of the Treasury Select Committee, and Rachel Reeves, chairwoman of the Business, Energy and Industrial Strategy Committee, demanding a joint inquiry into ‘the bonus culture among the country’s biggest housebuilders’.
He wants the chief executives and chairmen of Persimmon, Berkeley Group, Barratt Developments and Taylor Wimpey to explain their large bonuses.
On Friday, Fairburn caved in to pressure from investors and MPs and gave up £25 million of his £100million bonus. However, he still stands to make £75 million from the firm’s controversial incentive scheme, which has soared in value since the introduction of taxpayer-funded Help to Buy in 2013.
The firm also put a cap on the bonus, which is tied to share price performance, at £29 per share – £5 higher than the current price.
Cable, the former Business Secretary, said in his letter that even with the cuts, Persimmon’s bonus structure ‘smells of the worst style of fat cattery and financial engineering that helped create the credit crunch and financial crisis’.
He said of the bosses: ‘It cannot be right they are rewarded for a Government initiative that fuels demand and makes housing even more out-of-reach for first-time buyers and young families.
‘The housebuilding sector appears to be out of touch with the public and political attitude towards excessive pay. I believe a joint committee hearing could highlight this issue as well as give the executives the opportunity to explain why they use what appear to be overly generous payment schemes.’
Cable highlighted the multi-million pound bonuses for Berkeley’s bosses, and chief executive pay at Barratt and Taylor Wimpey.
Fairburn will face angry investors this week when he unveils the firm’s annual results. The housebuilders declined to comment.