Goodbye, Mr £75m ... hello, Mr £40m
New Persimmon chief’s ‘obscene’ bonus revealed
THE new boss of shamed building firm Persimmon was paid £40 million in the same bonus scheme that cost his predecessor his job.
Dave Jenkinson, who is taking over following the departure of Jeff Fairburn, has also suggested that developers should be allowed to build on the green belt.
The 51-year- old, currently Persimmon’s managing director, will become interim chief executive when Mr Fairburn, 52, leaves at the end of the year.
Mr Fairburn was finally ousted yesterday after a bitter row over a £102 million bonus that soared in value as the Government’s Help to Buy mortgage scheme boosted the company’s share price. The windfall was cut to £75 million following a fierce backlash from critics at a time when many families are struggling to get on or move up the housing ladder despite assistance from the taxpayer.
Mr Fairburn had pledged to hand some of the money to charity but it was not enough to save his job.
The company said yesterday the pay deal was still a ‘distraction’ and ‘continues to have a negative impact on the reputation of the business’.
Mr Fairburn was informed of his likely fate by new Persimmon chairman Roger Devlin over the weekend, and his departure was signed off during a conference call of board members on Tuesday night.
Liberal Democrat leader Sir Vince Cable said: ‘It’s about time – and I hope the lesson has been learned by other executives not to be greedy.’
Mr Fairburn will keep his bonus but will not get a payoff. He will be given up to £ 10,000 to cover any legal fees, the company said. But the decision to promote Mr Jenkinson raised eyebrows because he also benefited from the extravagant bonus scheme, earning a total of £40 million in Persimmon shares.
Mr Jenkinson has also argued that protections on green belt land should be rolled back so more homes can be built.
Two years ago, he said: ‘It’s absolutely impossible in my opinion to reach the output numbers, I think, unless we do it. If you look at the 100,000 houses we’re short of a year, it’s all tied up in the green belt local authorities – every piece of it.’
Critics reacted with anger last night to Mr Jenkinson’s appointment, even on an interim basis.
Luke Hildyard, director at the High Pay Centre, said: ‘Mr Fairburn had become something of a poster boy for executive greed and the furore clearly wasn’t going to go away. The change in chief executive was overdue and sends an important message about excessive and disproportionate executive pay.
‘But at the same time, it’s striking that his interim replacement was part of the same incentive scheme, and was paid an astonishing £40 million. ‘This was less than Mr Fairburn but remains an obscene amount for someone who wasn’t even the lead executive.’ Matt Thomson, head of planning at the Campaign to Protect Rural England, said: ‘Green belt land is some of the most profitable for developers to build on due to it being shovel ready, surrounded by countryside and within commuting distance to major cities – making its release for development extremely desirable for housebuilders. ‘Calls from the new head of Persimmon to relax green belt policy will have little to do with his desire to build more affordable homes, but to fill his already bulging pockets at the expense of important and valued countryside. His comments should be simply ignored.’ Announcing the shake-up at Persimmon, Mr Devlin said: ‘The board believes that it is now necessary for there to be a change of leadership. On behalf of the board, I would like to thank Jeff for his significant contribution to the business over a 29-year period.’
He said Persimmon shares had doubled in value under Mr Fairburn, but added that ‘the company has learned its lessons’ and pledged to focus on building betterquality homes following a string of complaints about shoddy workmanship.
‘When people buy a home they care about the quality of home, the finish, and the time it takes to deliver,’ he said.
‘This is what really matters to our customers.’
Mr Fairburn said: ‘It has been an honour to lead Persimmon. I had hoped that revealing my plans to create a charitable trust and to waive a proportion of the award would enable the company to put the issue behind it.
‘However, this has not been the case and so it is clearly now in the best interests of Persimmon that I should step down.’