Persimmon boss to depart after £75m bonus row
Image: Jeff Fairburn
Jeff Fairburn, group chief executive of housebuilder Persimmon, is to leave the company at the end of this year after the company said controversy over his remuneration – said to involve a £75m bonus – had become a “distraction”.
David Jenkinson, currently group managing director, will be appointed as interim group chief executive from 31 December 2018.
Nearly half of Persimmon’s investors voted against the company’s pay report at the company’s AGM in April.
Fairburn had been in line to receive £100m in payouts but agreed to give up £25m of that in February after critics claimed the sums due to him and other executives at the company were inflated by government housing market stimulus in the form of Help to Buy.
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 £3.4bn to £7.5bn, 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 [long-term incentive plan], the board believes that it is now necessary for there to be to be a change of leadership.”
Because Fairburn is leaving at the request of Persimmon, the company said it does not have any power to withhold or seek forfeiture over any of shares due to him under a share option scheme, although the shares will continue to be required to be held until 6 July 2021.
However, it has reduced his 12-month notice period and he will not be paid any further salary or benefits (including pension) after 31 December 2018. He also has no bonus entitlement for 2018 and no awards under any of the company share plans other than his deferred bonus share scheme awards and unvested save as you earn (SAYE) options, which lapse on departure.
Meanwhile, Jenkinson’s remuneration will not change on his appointment to interim CEO.
Fairburn said: “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.”