A prominent City investor has requested that leading housebuilder Persimmon pull back on a scheme that could see the housebuilder’s management dividing £600m over the next five years.
The programme has been described as one of the biggest of its kind at a non-banking FTSE company.
Chief executive Jeff Fairburn will be the biggest beneficiary, with more than £100m potentially due. Royal London Asset Management representative Mike Fox insisted that the payments were simply too high.
Mr Fox, head of sustainable investment at Royal London Asset Management, asked the board to cut back on its plans in view of the housing crisis and government support for the housebuilding sector.
When the programme was implemented, the housing market was in the process of recovering from the recession of 2008. A group of managers, approximately 150 in total, were provided with the opportunity to earn shares worth up to 10% of Persimmon’s value, on the condition that they hit challenging targets.
Persimmon recently confirmed that it was well ahead of those goals and analysts predict that the scheme will be paid out as planned. Company shares have tripled in value since the plan was put in place, rising to around £20 from £6.20.