£700k pay-off for Bovis boss ousted in £7m homes scandal
TROUBLED housebuilder Bovis Homes has come under fire after handing its former boss a pay- off worth nearly £700,000.
David Ritchie resigned as chief executive of the struggling firm on January 9 following a shock profits warning and stinging criticism over the quality of its new homes.
It emerged the company offered families thousands of pounds to move into unfinished homes in a desperate bid to hit sales targets. It later set aside £7m to deal with complaints over shoddy workmanship from furious customers and is fighting off takeover bids.
But despite leaving Bovis in crisis, Ritchie will receive salary and pension contributions of £676,500 up to January 8 next year. He will also get a bonus of £55,000 for 2016 and collect shares worth £735,000 for work done in previous years.
Critics last night accused Bovis of paying a ‘reward for failure’. Oliver Parry, head of corporate governance policy at bosses’ business group the Institute of Directors, said: ‘This doesn’t look good and it doesn’t do the reputation of British business any good.’
Ritchie, 47, was paid as normal until the end of February, when he formally left the company, having quit seven weeks earlier.
Documents released by Bovis show he then received a lump sum of £242,180 this month and gets another £338,250 by December ‘in lieu of notice for the remainder of his contractual period’.
Ritchie has been given continued use of his company car until January and medical insurance and life cover over this period.
He picked up 52,463 shares last month, worth nearly £480,000 at last night’s closing price of 914p. He is entitled to another 27,957 this year, worth some £255,000.
Stefan Stern, director of the High Pay Centre, said: ‘This is a reward for failure. This sort of pay-off reflects the way in which executive pay is trapped in a world of its own.
‘No one else would expect to receive this sort of payment after having underperformed in a job.’
The row over his pay comes as companies face a mounting back- lash over excess in the boardroom. Earlier this month it emerged that WPP chief executive Sir Martin Sorrell has been handed £42m in shares, and Prime Minister Theresa May is on record for criticising the ‘ irrational and unhealthy’ divide between bosses and ordinary workers.
Bovis declined to comment.