Shareholders revolt against £630m Persimmon payout
A UK shareholders society has rejected housebuilder Persimmon’s £630m payout to its top management team as anger grows over ‘fat cat’ payouts.
ShareSoc has recommended that its members vote against plans for remuneration laid out by York-based FTSE100 firm Persimmon.
It called enhanced director pensions “unnecessary icing on the cake” labelling it “excessive greed” to not reduce the current pension allowance for current directors, though new directors will receive the same level of pension as their employees.
Roger Lawson, deputy chairman of ShareSoc said that this means CEO Jeff Fairburn can sell £2m of his shares whenever he likes.
Lawson criticized the move as unfair, saying it opened up questions about Fairburn’s motivation and dedication to the growth of the company.
Lawson said that Persimmon should require executive directors to hold their shares until 2 years after they leave, allowing time for legacy issues to show through before the executives cash in their shares.
Persimmon reported revenues of £3bn in 2016, up 8%, and committed another £77m to shareholders as part of its plans to return £1.9bn to shareholders by 2021. Profit before tax increased by 23% to £774.8m.
It was already attacked by fund manager Royal London Asset Management over its executive pay plans last year, but has made no moves to placate growing discontented shareholders.
There has been a growing backlash over CEO remuneration, with Thomas Cook backtracking on plans which would have seen chief executive Peter Fankhauser earn 225% of his salary in bonuses, and publisher Pearson facing resistance after boss John Fallon’s pay rose 20%, despite the company reporting a record £2.6bn loss for 2016.
The Equality Trust calculated that the average FTSE chief executive salary of £5.3m is 386 times greater than a worker on the National Living Wage.
Prime Minister Theresa May even waded in, saying she would force companies to publish pay ratios and put workers on boards, but has had to scale back plans as she courts big business ahead of Brexit decisions.
