Persimmon bosses agree £51m cuts to bonuses after outcry

Executives at housebuilder Persimmon (Frankfurt: 882058 - news) have agreed to £51m worth of cuts to their bonuses after an outcry over the expected bonanza.

The construction giant has come under increasing pressure over the plans which would have seen chief executive Jeff Fairburn receive £100m via a share option scheme.

He will now take £25m less, while the £78m value of a bonus for finance director Mike Killoran will be cut by £24m and managing director Dave Jenkinson has agreed to a cut of £2m to £38m.

Persimmon has come under persistent pressure after the value of the executives' bonuses was seen to have been inflated by the Government's Help To Buy scheme.

That intervention to help the housing market came in 2013 – after the company's long-term bonus plan, had been devised in 2012 – and pushed up the value of the shares to be awarded.

Persimmon's chairman Nicholas Wrigley resigned over the issue in December amid growing shareholder anger.

Earlier this month, Mr Fairburn said he would set up a charitable trust to donate a "substantial proportion" of his windfall to good causes.

But pressure on the company increased when the company's sixth largest shareholder, Aberdeen Standard Investments, this week described Mr Fairburn's bonus as "grossly excessive" and said it remained a "huge concern".

Persimmon has now announced, days ahead of its final results, that the three executives had decided to accept reduced payouts.

The company maintained that the bonus scheme, backed by more than four-fifths of investors when it was set up, had been a key factor in its "outstanding performance".

But it acknowledged that the absence of a cap on the scheme had "given rise to the potential for pay-outs which, when triggered in full, will be significantly larger and paid earlier than might reasonably have been expected at the time the scheme was originally put to shareholders".