Mr £131m is giving builders a bad name
Redrow boss brands fat cat bonuses at Persimmon ‘very, very wrong’
A FAT cat housebuilder is tarnishing his whole industry by clinging onto a toxic bonus worth as much as £131m, a rival boss has said.
Persimmon chief executive Jeff Fairburn has faced criticism over a lucrative deal that will see him handed 4.8m shares in the company in one of the biggest paydays in British corporate history.
Rival developer Steve Morgan, the founder of Redrow, yesterday said the size of the bonus reflected badly on everyone in the industry.
Morgan, 65, set Redrow up in 1974 and has a 25pc stake, supporting himself by taking a dividend rather than a salary and bonus.
He said: ‘One company has got it very, very wrong. Everybody in the industry is as peed off with this Persimmon thing as the people outside it. For somebody who has not taken a salary for 20 years it sticks in the craw, being called a greedy housebuilder because of that company.
‘I’m sick to the teeth of seeing the headlines of greedy housebuilders. It is not true and they are doing the industry a complete disservice.’
The comments are the most outspoken criticism yet faced by Fairburn, 51, who has so far refused to bow to investor demands to give up 90pc of his bonus.
He and other senior managers are due to split around £600m between them in coming years.
The value of the scheme has soared since it was agreed in 2012 – thanks in part to the taxpayer subsidy enjoyed by Persimmon and rival builders through Help to Buy.
The bonus scheme was drawn up before Help to Buy was launched when Persimmon shares were far lower, and their meteoric rise since then was completely unexpected.
Critics of the payout claim that the stock boost has nothing to do with Fairburn’s talents as a boss and is merely due to sky-high property prices and state support.
Persimmon’s chairman and pay chief quit in disgrace over flaws in the way the bonus was drawn up.
Morgan said that if he had been chairman ‘it wouldn’t have happened’. He added: ‘In 2012, if you had said “This is your bonus but it will be capped at £10m”, he would have jumped at it.’
It came as Redrow unveiled record profits of £ 176m in six months to December 31, up 26pc on a year earlier thanks to a building spree and higher selling prices.
It built 2,811 homes in the period, up 14pc, while they sold for an average £330,000 each, 9pc higher. That pushed shares up 5.4pc or 32p to 625.5p yesterday – and added £30.1m to Morgan’s fortune.
Redrow hiked its interim dividend by 50pc to 9p per share, meaning the he will get an £8.5m payout.
Morgan said he is committed to helping ministers hit their target of 1m houses built by 2020, but that sweeping planning reforms would help it to happen.