Revolt looms over £92m pay bonanza at Berkeley

Shareholders advised to reject the housebuilder’s ‘excessive’ deals as its chairman earns £29.2m

BERKELEY Group is braced for a shareholder revolt this week over boardroom payouts totalling £92million – one of the largest pay deals in British corporate history.

The housebuilder, which specialises in upmarket London property, awarded six executives the sum in long-term share bonuses for 2016. Chairman Tony Pidgley earned £29.2million and chief executive Rob Perrins £28million under the plan, while two other directors took home eight-figure payouts.

Pidgley has earned £74million in the past three years, while Perrins has taken home £51million.

Shareholder advisory groups Glass Lewis and Pirc are advising shareholders to reject the pay arrangements at the group’s annual meeting on Wednesday.

Another influential adviser, ISS, said it had ‘concerns’ over the package, but recommended its clients vote in favour. But it made clear it is offering only ‘qualified’ support.

A major pay revolt would thrust the builder, which is set to be promoted to the FTSE 100 this month, into the frontline of a growing debate about corporate excess.

The Prime Minister said last week she planned to name and shame firms where shareholders have objected to excessive pay.

Berkeley’s directors hit the jackpot after exceeding targets drawn up in 2011. The pay committee promised executives a total of 19.6million shares as targets were hit over a ten-year period.

The housing market has boomed since then, and those shares are now worth £725 million. Glass Lewis called the payouts ‘grossly excessive’ and cast doubt on the scheme’s ability to incentivise bosses to work for the long-term growth of the firm. PIRC has recommended shareholders also reject the re-election of the directors on the remuneration committee.

Earlier this year Berkeley bowed to pressure and introduced a cap on future payouts. But it has not scaled back the lavish awards for the year ending April 30, 2017, which have already been paid. This week’s vote is non-binding.

A spokesman said: ‘90 per cent of executive pay last year came from shares earned over the past six years. It reflected exceptional sustained performance. This year we recommended halving key executive pay, which was backed by 97 per cent of shareholders.’