Persimmon rides out £800 million fat cat bonus controversy

A controversial £100 million payout to the boss of housebuilder Persimmon overshadowed an upbeat trading update yesterday that said profits for the full year will be ahead of expectations.

The long-term incentive plan instigated in 2012 at Persimmon, which has 40 develop- ments in Scotland, has been lambasted as fat cat excess by politicians as group chief executive Jeff Fairburn is in line to pocket the bumper pay award.

Fairburn became eligible for £40m of the payout on New Year’s Eve. It is part of a wider £800m award, linked to profit and housebuilding targets, to be shared among 140 of the builder’s top managers in 2021.

Persimmon defended the payout in a statement that said: “The long-term incentive plan scheme was approved by circa 85 per cent of shareholders in 2012.

“The long-term incentive plan is a long-term plan that was intended to run for almost a decade and which is designed to drive outperformance through the housing cycle and to incentivise the management to deliver the capital return, grow the business and increase the share price.”

The pay controversy led to chairman Nicholas Wrigley and remuneration committee chair Jonathan Davie’s joint resignation late last year.

Critics say Persimmon’s management benefited from the launch of the government’s Help to Buy scheme to trigger the payouts. 0 Jeff Fairburn – £100m windfall in the offing