Persimmon and Crest Nicholson shareholders rebel on executive pay rises

“Pirc advises shareholders to abstain on the annual remuneration report because of high pay for the chief executive, Jeff Fairburn: “The CEO-to-employee pay ratio for 2016 is at an unacceptable level of 55:1,” it says.

Mr Fairburn was paid £2.1m for 2016, up slightly from £2m a year earlier but less than half the £5m paid to then-chief executive Mike Farley in 2012.

Persimmon may be insulated from a large-scale pay rebellion because Institutional Shareholder Services, the largest proxy adviser, says shareholders should vote in favour of all motions at its annual meeting.

But the criticism of its pay scheme follows a revolt at Crest Nicholson, where 58 per cent of voting shareholders opposed the remuneration report in March after it cut profit targets at which incentives under its long-term pay plan kick in. It also comes at a time of growing disquiet over UK listed companies’ multimillion-pound payouts to top executives.

Housebuilders have been increasing profits and dividends as their businesses thrive thanks to house price rises, a shortage of new homes in areas of jobs growth, and the Help to Buy equity loan scheme. This programme enables buyers of newly built homes to receive government-backed loans so they can buy with deposits of only 5 per cent. At Persimmon, this scheme supports about 45 per cent of home sales.” …

https://www.ft.com/content/bb8628b8-269b-11e7-a34a-538b4cb30025

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