Persimmon admits to failures that led to rebellion over pay
HOUSEBUILDER PERSIMMON has admitted a raft of failures that led to an embarrassing shareholder rebellion over pay as MPs slammed an “egregious” pay deal for top bosses worth more than £100m.
Marion Sears, remuneration committee chair at the Yorkbased firm Persimmon, told MPs in a Commons committee hearing that the group had agreed an executive pay deal with no discretion or cap and failed to talk to shareholders early enough to resolve the row.
Charles Church builder Persimmon saw 48.5 per cent of investors vote against the pay plans in April as they vented anger over a £75m payout for chief executive Jeff Fairburn.
Earlier this year, shareholders and politicians united to condemn what would have been an even higher £100m payout, until Mr Fairburn voluntarily moved to calm the furore by handing back £25m in bonuses.
Other senior executives also landed multimillion-pound payouts under the controversial long-term incentive plan, with three bosses collectively eventually agreeing to hand back about £50m in bonuses to quell the mounting anger.
The pay controversy led to the resignation of chairman Nicholas Wrigley and former remuneration committee chair Jonathan Davie late last year.
In a bruising encounter with MPs on the Business, Energy and Industrial Strategy Committee, Ms Sears was criticised for failing to know the average worker’s pay at Persimmon, while Leeds MP Rachel Reeves, who chairs the committee, branding the group’s pay awards “egregious”.
When asked what lessons were learned from the pay debacle, Ms Sears - who took on the role after the pay deals were secured and amid the mounting row - said that there should be “remuneration discretion for undesirable outcomes” on pay.
She said: “We would have handled it better if we’d had earlier and better communication with shareholders.
“It was right in the end, but it was late.”
The group’s performance has been boosted in recent years by the Government’s Help to Buy scheme for first time buyers.
Earlier and better communication with shareholders. Marion Sears describes the measures the firm should have taken.