Jeff Fairburn, chief executive of Persimmon, Britain’s second largest house builder, has agreed to cut his bonus by £25 million — from £100 million.
The gesture, in the face of attacks on corporate greed, will also see two of his board colleagues loose £26.5m. Chief financial officer Mike Killoran will lose £24m from his bonus, originally set at £78m, while group managing director Dave Jenkinson’s incentive will drop by £2.5m to $40m.
The company recently announced a new office in Barham, between Ipswich and Needham Market, to boost its business in Suffolk.
The bonus scheme, established in 2012 linked bonuses to the share price. It has increased by 500% since February 2011, when it stood at 410p, to 2456 today.
The row over corporate greed at Persimmon led to board chairman, Nicholas Wrigley stepping down in December. The chairman of the remuneration committee has also departed.
House builders have been buoyant with a rising housing market and government support through the Help to Buy scheme.
A major investor, Ashley Hamilton Claxton, head of responsible investment at Royal London Asset Management, told the BBC:
This incident has been a classic corporate governance failure and highlights the need for remuneration committees to step up and make decisions if circumstances beyond a company’s control change
However, even after this reduction, in our view the scale of the remuneration on offer under this plan is still extremely generous given the government’s support for the sector through the Help To Buy scheme.