Persimmon boss Jeff Fairburn has failed to subdue the anger felt by shareholders over a £110m payout despite promising to give a “substantial” amount to charity.
Mr Fairburn said today that he planned to set up a charitable trust after facing criticism over his pay package, claiming that he was “misplaced” in believing the decision was a private matter.
But shareholders said their stance on objecting to Mr Fairburn’s pay was unchanged by the announcement.
Royal London Asset Management said it was still calling on Mr Fairburn to acknowledge the errors in the company’s bonus scheme and “correct them”, adding the problem did not lie with how he spent the money, but the fact that it was awarded in the first place.
A spokesman for the Church of England, which is also a shareholder in Persimmon and prides itself on its ethical investment practices, said: “We remain concerned about the level of remuneration.”
He added that the organisation would “continue to review its options” ahead of Persimmon’s annual general meeting in April.
Mr Fairburn said he “recognised and profoundly regretted” that the housebuilder’s performance was being “eclipsed by the controversy surrounding the 2012 LTIP (long-term incentive plan) award”.
As a result, he plans to use “a substantial proportion” of his bonus to support charities “in a very meaningful way”, he said. He did not disclose how much of his bonus he would be donating.
Persimmon’s LTIP was set up in 2012, when housebuilders were coming out of the doldrums of the financial crisis. It was designed to reward executives with shares worth up to 10pc of the company’s total value, depending on how much the group returned to shareholders through dividends and other cash returns.
There was no cap set on the payouts, meaning that as Persimmon’s share price climbed, the bonus payments reached £800m shared among 140 senior staff – among the biggest amounts ever seen in the UK
The company’s chairman, Nicholas Wrigley, and Jonathan Davie, head of the remuneration committee, stepped down in December over their role in creating the scheme.
But Mr Fairburn defended his payout, saying the LTIP was put in place before his tenure as chief executive had begun. He added that he “did not seek these levels of award nor do I consider it right to keep them entirely for myself”.
Of his decision to set up the charitable trust, he said: “In what might be considered to be an old-fashioned approach, I believed that this was a personal matter and that I would be able to do this privately. It’s now clear that this belief was misplaced and so I am making my plans public and recognise that I should have done so sooner.”