- Remuneration committee boss could not recall the salary for average workers
- No cap pay deal for top bosses was not discussed with shareholders early on
Bosses at housebuilder Persimmon have been slammed by MPs over an ‘egregious’ pay deal that landed them over £100million.
Marion Sears, remuneration committee chair at Persimmon, told MPs in a committee hearing that the group had agreed an executive pay deal with no discretion or cap and failed to discuss it with shareholders early enough.
The pay controversy led to the resignation of chairman Nicholas Wrigley and former remuneration committee chair Jonathan Davie late last year.
Stern words: Bosses at housebuilder Persimmon have been slammed by MPs over an ‘egregious’ pay deal that landed them over £100million
During a bruising encounter with MPs today, Persimmon’s remuneration committee chair, Marion Sears, could not recall how much the average worker’s pay packet was at the company.
Charles Church builder Persimmon saw 48.5 per cent of investors vote against the pay plans in April as they vented anger over a £75million payout for chief executive Jeff Fairburn.
Earlier this year, shareholders and politicians united to condemn what would have been an even higher £100million payout, until Mr Fairburn voluntarily moved to calm the furore by handing back £25million in bonuses.
Other senior executives also landed multimillion-pound payouts under the controversial long-term incentive plan, with three bosses collectively eventually agreeing to hand back about £50million in bonuses to quell the mounting anger.
When asked what lessons were learned from the pay debacle, Ms Sears, who took on the role after the pay deals were secured and amid the mounting row, said that there should be ‘remuneration discretion for undesirable outcomes’ on pay.
She said: ‘We would have handled it better if we’d had earlier and better communication with shareholders.
‘It was right in the end, but it was late.’
She added: ‘We had an incentive scheme that was a contractual entitlement without any discretion or cap.
‘The company did very well – it was a stunning business performance, but it gave rise to a total shareholder return and share price performance that resulted in sizeable outcomes for executives.’
Ms Sears said she had been working ‘nearly full-time’ on the pay issue at Persimmon up until its April annual general meeting, although she does hold posts at other companies, including homewares firm Dunelm.
Persimmon’s share price is up 0.88 per cent or 25p to 2,853p.