The Great Help-to-Buy ripoff

“Building chiefs cash in on Help to Buy”

Bosses at Persimmon, Barratt and Bellway have been handed shares worth more than £12million.

Persimmon chief executive David Jenkinson exercised share options worth £10million under the housebuilder’s controversial bonus scheme, while two top Barratt executives received stock worth nearly £1million, and two Bellway bosses were handed performance-linked shares worth £1.6million.

The bonanza came just a day after Tony Pidgley, the founder and chairman of rival builder Berkeley, sold shares worth £42million.

His deal took the amount he has made from selling stock in the past two and half years to £166m.

Last night critics condemned the share awards, which came just a week after figures showed the rate of house building in the UK had hit a three-year low.

Developers such as Persimmon, Barratt and Bellway – but less so Berkeley – have also raked in record profits off the back of Help to Buy, a taxpayer-funded scheme that lends cash to buyers.

Reuben Young, a spokesman for housing campaign group Priced Out, said: ‘The scandal is these payouts are only made possible by Help to Buy, which has taken developer profits into the stratosphere by investing public money into rising house prices.’

Persimmon’s Jenkinson, 52, received 411,084 shares worth £9.7million at yesterday’s prices. After taxes he received 217,874 shares worth £5.2million and he is required to hold on to them for at last one year.

Barratt chief executive David Thomas received 64,182 shares worth £431,000 through a bonus plan and deputy chief Steven Boyes received 50,795 worth £341,000.

Bellway awarded 30,667 performance-linked shares worth about £1million to boss Jason Honeyman and 17,823 shares worth about £600,000 to finance chief Keith Adey.

The final amount of shares they receive will depend on whether they hit performance targets.

Meanwhile, Pidgley has sold shares in the past six months that have made him £79.2million.

That included 1m he sold in July for £37.2million and a further 1m on Tuesday for £42million, cashing in on his company’s rising share price.

The sales came after Pidgley previously sold a total of 2.5m shares for £86.8million in 2017 – taking the amount he has made since then to a staggering £166million.

The building firms declined to comment.

https://www.thisismoney.co.uk/money/markets/article-7585531/Building-chiefs-cash-Help-Buy.html

“Property giants pay bosses £63m while ‘exacerbating housing crisis’ by sitting on enough land for 470,000 homes”

“Property giants have been accused of rewarding bosses for “exacerbating the housing crisis” after spending £63.6m on chief executive pay last year while sitting on more than 470,000 unused plots of land.

The chief executives of Britain’s 10 biggest housing developers raked in a combined £63.6m, earning a median sum of £2.1m, according to figures compiled by the High Pay Centre. Four FTSE 100 companies handed £53.2m to their top bosses in total, a median pay packet of £5.7m.

The 10 firms completed and sold 86,685 homes last year, but hold planning permission for 470,068 other plots of land on which homes have not been built. The UK needs an estimated 340,000 new homes a year to meet demand.

Councils have repeatedly complained of developers taking longer to build on sites which have been earmarked for housing, with the Local Government Association calling for powers that would allow local authorities to seize unused land.

The High Pay Centre said its findings raised questions about whether executives “should receive such vast sums of money, particularly given the many criticisms levelled at the big housing developers regarding the extent to which they are exacerbating the housing crisis”.

Luke Hildyard, the think tank’s director, told The Independent: “Homes are a public good and housing companies are charged with quite an important social responsibility. If the housing companies don’t play their part in delivering enough homes then we have real problems.

“There is something particularly unseemly about people who are supposed to be providing a public good raking in millions or even tens of millions.”

The 10 companies, which are all FTSE 350-listed, paid a combined £150m to chief executives and other directors last year. The four FTSE 100 house-builders – Barratt, Berkeley, Persimmon and Taylor Wimpey – accounted for £131.1m of that sum.

The average UK construction worker is paid £24,964 a year, 89 times less than the median pay packet of the 10 housebuilders’ chief executives, according to the union Unite.

The pay disparity was greatest at Persimmon, where chief executive Jeff Fairburn earned £39m – equivalent to the average pay of 1,561 construction workers – last year. He was forced out of the firm in late 2018 after a public outcry over his £75m bonus.

The pay ratio between Berkeley’s chief executive and the average construction worker was 331:1, at Taylor Wimpey it was 126:1, and at Barratt it was 113:1.

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Labour MP Siobhan McDonagh, who cited the figures during a debate in parliament on Thursday, said the “vast scale of inequality” showed “the British housebuilding industry is broken”.

She added: “In the midst of a national housing crisis, how can it be right, just or fair, for the top housebuilding CEOs to walk away with such astronomical sums while there are workers are seeing their salaries stagnate?

“These companies have a land bank of a simply staggering 470,068 plots but completed just 86,685 homes between them. Is that really a record worth rewarding?”

Barratt, Berkeley and Taylor Wimpey all declined to comment.

Persimmon did not respond to a request for comment.”

https://www.independent.co.uk/news/business/news/property-developers-housing-crisis-homebuilding-chief-executive-pay-ftse-100-a9093676.html