Persimmon boss to step down following backlash over £75m bonus
The group chief executive of housebuilder Persimmon, Jeff Fairburn, is set to step down following the controversy surrounding his £75m bonus.
The York-based company announced that the attention his pay packet has received “continues to have a negative impact on the reputation of the business and consequently on Jeff’s ability to continue in his role.”
David Jenkinson, currently group managing director, will be appointed as interim group chief executive and will assume his new role on 31 December, when Fairburn will leave the company.
A process to select a permanent successor has already begun.
Directors at Persimmon were given huge bonuses under the company’s Long Term Incentive Plan dating back to 2012.
Fairburn was initially received £100m, but after being criticised for taking such a large bonus from an uncapped scheme which was set up before he joined the firm, he agreed to donate £25m to charity to take his bonus to £75m.
In August, it was also revealed that Fairburn was the highest paid CEO in the financial year ending 2017 after receiving £47.1m, 22 times his 2016 pay.
Due to this backlash on 6 November, Fairburn and Persimmon agreed to the terms of a Settlement Agreement whereby his employment will end on 31 December.
Roger Devlin, Persimmon’s chairman, said: “Under Jeff’s leadership Persimmon has sold more than 74,000 homes across the UK while more than doubling in size, increasing its market capitalisation from £3.4 bn to £7.5 bn, returning over £2.2bn to shareholders and producing industry leading margins and returns on capital.
“However, given the continuing distraction around the scale of his remuneration resulting from the 2012 LTIP, the Board believes that it is now necessary for there to be to be a change of leadership. On behalf of the Board I would like to thank Jeff for his significant contribution to the business over a 29 year period.
“David is an experienced operator in the housebuilding sector and has made a significant contribution to Persimmon in a number of senior roles, particularly in land purchasing. I am grateful that he has agreed to take on the role of interim CEO.”
Fairburn added: “It has been an honour to lead Persimmon through an exciting period of development. I had hoped that revealing my plans to create a charitable trust and to waive a proportion of the award would enable the Company to put the issue of the 2012 LTIP behind it. However, this has not been the case and so it is clearly now in the best interests of Persimmon that I should step down. I wish the Company the very best for the future.”
