Shareholders plot to kick Mr £131m off the board

One of Britain’s biggest builders faces a shareholder revolt over a ‘preposterous’ bonus scheme that could see its boss handed £131m.

Powerful City investors are planning to give Persimmon a bloody nose at its annual general meeting by voting against the reappointment of directors – including the chief executive, Jeff Fairburn.

The threat to kick the 51-year-old off the board comes a week after he pledged to give a ‘substantial proportion’ of his bonus to charity but refused to say how much.

His move has failed to quell anger among shareholders, putting pressure on Fairburn ahead of the AGM in April. ‘We are really annoyed,’ a major investor told the Mail. ‘Promising to give a non-disclosed sum of money to a non-disclosed charity is not going to get him out of jail.’

Persimmon has faced a fierce backlash over a bonus scheme agreed in 2012 that will see around 150 managers at Persimmon handed shares worth £742m.

Mr Fairburn has been dubbed ‘Mr £131m’ over the size of his potential windfall in what would be one of the biggest paydays in British corporate history.

Persimmon chairman nicholas Wrigley and remuneration committee chairman Jonathan Davie resigned late last year over the row, admitting that the bonus pot should have been capped.

Major investors are now threatening to use the AGM to vote against the reappointment of non- executive directors and members of the remuneration committee responsiby ble for setting pay.

But in a highly unusual move, shareholders could also target Fairburn amid concerns that his handling of the situation has damaged the company.

euan Stirling, global head of stewardship at Aberdeen Standard Investments, one of Persimmon’s biggest shareholders with a 2.4pc stake, urged investors to consider voting Fairburn off the board. Describing the size of the bonus as ‘grossly excessive’, he said: ‘To suggest that more than £100m is the correct level of reward for successfully running a housebuilder in the UK is preposterous, but that is the line that Fairburn appears to be sticking to.

‘As a director, Fairburn has a responsibility to promote the best interests of the business that he is employed by, and his insistence in extracting such a high proportion of the value that has been created is damaging, both financially and reputationally, to the company.

‘That responsibility is established in statute and would be foolishly ignored. Fairburn and all board members should demonstrate their duties as directors to promote the success of the company, including having regard to the desirability of the company maintaining a reputation for high standards of business conduct and the likely consequences of any decision in the long-term.’

He added: ‘ The urgency for this issue to be resolved heightens, in order that confidence in the company can be restored.’

Many critics of the bonuses accept Persimmon has performed well under the stewardship of Fairburn, who joined the company in 1989 and became chief executive in 2013.

But they also say it benefited from factors outside his control, including record low interest rates and a taxpayer subsidy in the form of Help to Buy.

Figures obtained by the Mail show Persimmon has sold 21,533 homes through the scheme with taxpayers providing £943m in loans to the buyers of those properties. Mirza Baig, head of stewardship at Aviva Investors, another major shareholder, voiced concerns over the ‘sheer size’ of the bonus.

And Ashley Hamilton Claxton, head of responsible investment at Royal London Asset Management, said the pay row was a ‘classic governance failure’.

She added: ‘ We will consider our votes on directors, based on what’s happened this year.’

Persimmon declined to comment yesterday.