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| Persimmon chair resigns over chief executive's 'obscene' £128m bonus | Persimmon chair resigns over chief executive's 'obscene' £128m bonus |
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| The chair of Persimmon has resigned over his role in orchestrating a £128m bonus for the housebuilder’s chief executive, Jeff Fairburn, that will begin paying out on New Year’s Eve. | The chair of Persimmon has resigned over his role in orchestrating a £128m bonus for the housebuilder’s chief executive, Jeff Fairburn, that will begin paying out on New Year’s Eve. |
| Nicholas Wrigley, the company’s chair and a former banker, said he regretted not capping the bonus scheme and was leaving “in recognition of this omission”. | Nicholas Wrigley, the company’s chair and a former banker, said he regretted not capping the bonus scheme and was leaving “in recognition of this omission”. |
| The Guardian understands that Wrigley had put pressure on Fairburn to donate of some of his bonus to charity, although Persimmon declined to comment. | |
| The bonus scheme – believed to be the most generous ever in the UK – is due to start paying out more than £800m to 150 senior staff on 31 December. The payouts are linked to the company’s stock market performance, which has been massively boosted by the government’s help to buy scheme. | The bonus scheme – believed to be the most generous ever in the UK – is due to start paying out more than £800m to 150 senior staff on 31 December. The payouts are linked to the company’s stock market performance, which has been massively boosted by the government’s help to buy scheme. |
| Persimmon’s share price has more than doubled since George Osborne introduced help to buy in 2013. About half of Persimmon homes sold last year were to help to buy recipients, meaning that government money helped finance the sale. | Persimmon’s share price has more than doubled since George Osborne introduced help to buy in 2013. About half of Persimmon homes sold last year were to help to buy recipients, meaning that government money helped finance the sale. |
| The pay deal, which was put in place in 2012, has been widely criticised by politicians, charities and corporate governance experts the Guardian had contacted this week. | The pay deal, which was put in place in 2012, has been widely criticised by politicians, charities and corporate governance experts the Guardian had contacted this week. |
| Vince Cable, the leader of the Liberal Democrats, said the “scale of this bonus is obscene” and built on a “government subsidy”. | Vince Cable, the leader of the Liberal Democrats, said the “scale of this bonus is obscene” and built on a “government subsidy”. |
| “It is reminiscent of the worst excesses of corporate greed that helped to create the financial crisis, when short-termism was heavily incentivised and long-term planning ignored,” he said. | “It is reminiscent of the worst excesses of corporate greed that helped to create the financial crisis, when short-termism was heavily incentivised and long-term planning ignored,” he said. |
| “This is a also a perverse situation where corporate fortune has been built on what is essentially a government subsidy in help to buy. This situation shows just why help to buy is so flawed: it fuels demand rather than supply, putting house prices even further out of reach of young people, while adding zeros to the bank balances of housebuilding executives.” | “This is a also a perverse situation where corporate fortune has been built on what is essentially a government subsidy in help to buy. This situation shows just why help to buy is so flawed: it fuels demand rather than supply, putting house prices even further out of reach of young people, while adding zeros to the bank balances of housebuilding executives.” |
| Polly Neate, the chief executive of Shelter, a housing charity, said: “Help to buy has comprehensively failed to help those most in need of an affordable home. Instead, it’s made the situation worse by inflating house prices and subsidising developers’ profits. | Polly Neate, the chief executive of Shelter, a housing charity, said: “Help to buy has comprehensively failed to help those most in need of an affordable home. Instead, it’s made the situation worse by inflating house prices and subsidising developers’ profits. |
| “Rather than pumping public money into the broken market, the government should direct funding towards genuinely affordable homes and intervene to lower the cost of land.” | “Rather than pumping public money into the broken market, the government should direct funding towards genuinely affordable homes and intervene to lower the cost of land.” |
| Fairburn is due to collect the first £50m worth of bonus shares on New Year’s Eve. The bonus scheme, which is based on the level of dividend returned to shareholders, was meant to take 10 years to pay out but the company has accelerated dividend payments. This means Fairburn, other executives and more than 100 managers are likely to collect all of the £800m by July 2018 far ahead of the 2021 schedule. The top three Persimmon bosses are due to collect more than £230m. | |
| John Hunter, chairman of the UK Shareholder Association which represents small investors, said the |