Persimmon boss Jeff Fairburn pushed out over £75m pay row

Persimmon (Frankfurt: 882058 - news) says its chief executive Jeff Fairburn is to leave at the end of the year "at the request of the company" amid a continuing row over his £75m in pay awards.

The UK's largest housebuilder said he would go "by mutual agreement" on 31 December and be replaced on an interim basis by the group's managing director David Jenkinson pending the appointment of a permanent successor.

The company's statement said of Mr Fairburn's departure: "The board believes that the distraction around his remuneration from the 2012 LTIP (long-term incentive) scheme continues to have a negative impact on the reputation of the business and consequently on Jeff's ability to continue in his role."

Almost half of Persimmon's investors voted against its pay report at the AGM in April as disgust over the size of his pot forced its chairman and pay committee to quit.

Mr Fairburn was the highest paid CEO in the financial year ending 2017 when he received £47.1m.

That was more than 20 times his pay in 2015/2016.

The decision to cut him loose risked a further backlash as it emerged that because he had been asked to leave, the firm could not prevent the payment of the payouts due to him under the share option scheme.

Persimmon said Mr Fairburn had agreed to cut his 12-month notice period and would not receive any further salary or benefits after 31 December.

Shares (Berlin: DI6.BE - news) - down 14% in the year to date - were 0.5% lower at the close.

Mr Fairburn - and other executives - first agreed to cut their awards in February after widespread outrage over the sums which critics said were inflated by government housing market stimulus in the form of schemes such as Help to Buy.

He had been due to receive £100m but gave up £25m.

Mr Fairburn said: "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."

Persimmon also confirmed its positive outlook in a trading statement - with forward sales 9% up.

Sophie Lund-Yates, equity analst at Hargreaves Lansdown (Frankfurt: DMB.F - news) , said news of his departure was "unexpected" but it allowed the group to focus on performance.

"It has been enjoying considerable buoyancy aids including various Help to Buy and deposit boosting savings schemes such as Help to Buy ISA and Lifetime ISA.

"It also continues to benefit from the wider market of low interest rates and good mortgage availability which feed into the top line.

"Plus it's that time of year when last minute movers push to get settled before the festive season, so an uptick in sales isn't unusual.

"Not to take away from Persimmon's success, the proof will be in the pudding at January's full year announcement, where further evidence of operational, rather than external tailwinds would go down a treat."