Persimmon remuneration chair comes under pressure from MP for failing to know average salaries

An MP has hit out at York-headquartered housebuilder Persimmon after the chair of its remuneration committee failed to know the average pay of staff members.

Rachel Reeves, MP for Leeds West & Chair of the Business, Energy and Industrial Strategy Select Committee, was questioning Persimmon’s remuneration committee chair, Marion Sears. She was giving evidence to the select committee after Persimmon came under fire from shareholders earlier this year by awarding its chief executive Jeff Fairburn a £75m bonus.

He was to collect a total of £110m worth of bonus shares, but agreed to give up half of the second half of the award, also announcing he was to give a substantial amount to charity.

At yesterday’s committee meeting, Sears said: “The average … I don’t have that figure to my finger tips,” when asked by the committee chair, Rachel Reeves, what average pay was.

“You’re chair of the remuneration committee at Persimmon aren’t you? And you don’t know what average pay is, as chair of the remuneration committee?” said Reeves at the hearing.

Afterwards, Rachel Reeves tweeted: “A company that can afford to pay its Chief Executive £45m should know what the average wage of an employee in its business is. Answers from Persimmon a disgrace.”

This prompted Persimmon to later confirm the average salary at the firm is £35,600.

When asked by Reeves whether or not Persimmon was a living wage employer, Sears said it was, but added that the listed firm was not accredited by the living wage foundation.

Fairburn’s total pay stood at £47.1m.

Reeves went on to later tweet: “A firm that can pay tens of millions of pounds to its top bosses but denies the living wage to its staff must look in the mirror and ask ‘is this fair?’ (If they need help the answer is no).”

The committee hearing went ahead after shareholders at Persimmon raised concerns about Persimmon chief executive, Jeff Fairburn’s bonus after an incentive plan was not capped at the firm; this lead to his being awarded £110m in bonuses – which he later announced he would give a substantial amount of to charity.

Fairburn received the first £50m worth of bonus shares on 31 December and will collect the remainder of his long-term incentive plan share award on 1 July.