Rival rips into Persimmon’s huge bonuses

REDROW chairman Steve Morgan today launched a blistering attack on rival housebuilder Persimmon’s hugely controversial £110 million bonus for its boss.

He spoke out after the row over Persimmon’s long-term scheme — netting fortunes for chief executive Jeff Fairburn and other managers — exploded last month when Fairburn became eligible for the first £45 million of his bonus.

Persimmon’s chairman and remuneration chief resigned in December over the scheme, introduced in 2012.

Redrow founder Morgan (pictured), whose stake in the business is worth £750 million, fumed: “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 one company. I’m sick to the teeth of seeing the headlines of greedy housebuilders. It is not true and they are doing the whole of the industry a complete disservice.”

He added that if he had been chairman “it wouldn’t have happened”, saying: “The reality is that they are between a rock and a hard place. Even if they wanted to do something they are contractually committed to. In 2012 if you had said ‘This is your bonus but it will be capped at £10 million’, he would have jumped at it.”

Soon after Persimmon introduced the bonuses, the Coalition government introduced Help to Buy to encourage building and assist first-time buyers onto the property ladder, fuelling the share prices of major housebuilders. But the huge £600 million payments triggered to Persimmon top brass as a result have been labelled “obscene” by politicians including Liberal Democrat leader Sir Vince Cable. Persimmon declined to comment on Morgan’s remarks but Fairburn is under pressure to give away some of the cash.

He has so far insisted that his charitable giving is a private matter but shareholders are said to be increasingly concerned about the reputational damage to Persimmon.

Morgan gave away 42 million of Redrow’s shares, worth £250 million at today’s prices, a year ago.

The latest row came as Redrow posted record first-half results in the six months to December 31, with revenues up 20% to an all-time high of £890 million and record pre-tax profits of £176 million, 26% ahead of a year earlier. The dividend jumped 50% to 9p a share, worth nearly £11 million to Morgan in dividend payments. @russ_lynch