Industry bosses condemned for excessive pay packets
Housebuilders that have benefited from government Kickstart funds have been condemned by MPs for paying bosses “unthinkable bonuses”, reports Building. In the same week, the magazine also revealed that the industry's highest paid executive took home a £10m salarylast year.
MPs reacted angrily to the decision of two housebuilders that received millions of pounds in Kickstart subsidies to pay bonuses to their chief executives.
Last week, Building reported that Peter Redfern of Taylor Wimpey received a £788 000 bonus for 2009, despite his loss-making firm being earmarked for £6.9m of Kickstart grant.
Meanwhile, Persimmon boss Mike Farley was paid a £406,000 bonus for the same year, when his firm received £32.2m of Kickstart funding.
Clive Betts, a Labour member of the House of Commons’ housing select committee, said: “When firms have been in difficulty and when public money has been used, they ought to be very careful about allocating money this way. They need to think very carefully about how it looks to the public to be handing well-paid executives further bonuses.”
Sarah Teather, the Liberal Democrats’ housing spokesperson, echoed his comments, saying: “Organisations in receipt of public money have a duty to use that wisely. It is unthinkable that, in the middle of a housing crisis, huge bonuses should take priority over new homes.”
Roger Humber, adviser to the House Builders Association, commented – in a personal capacity – that the decision echoes recent cases of bankers' bonuses. “Although it is on a smaller scale, this is the same principle as bankers getting paid huge bonuses after they’ve been bailed out.”
Meanwhile, Building reported that the highest-paid director at privately-owned contractor Bowmer & Kirkland is to receive £10.2 m for 2009, by far the highest salary in construction, even though the firm’s pre-tax profit fell by a third.
The salary, believed to be for chair John Kirkland, is up more than 50% on last year’s figure of £6.7m and is almost three times the rate of the next top payer in the industry, Wates Group, which paid its top executive £3.8m in 2009.
In total, Bowmer directors will receive £20.7m, up 40% on 2008.
A construction boss told Building: “It’s excessive and a bit insensitive in an industry that is already suffering. It doesn’t make it easy to cut staff costs or salaries because staff will see it as one rule for one and one rule for another.”
Bowmer Kirkland, Persimmon and Taylor Wimpey were unavailable for comment.