ONE of the region's leading housebuilders has come under fire over a bonus scheme that has seen top executives handed “grossly excessive” awards amounting to hundreds of millions of pounds.
Persimmon
Board member, Marion Sears, who chairs the company’s pay-setting panel, appeared to forget about £45m her company handed to chief executive Jeff Fairburn last year before swiftly remembering when grilled further by Labour's Rachel Reeves, chair of the Business, Energy and Industrial Strategy Committee.
Ms Sears, who was appearing before MPs to discuss the controversial bonus scheme, was asked: “What was the chief executive paid last year and the year before at Persimmon?”
The York-based builder 48.5% of investors vote against the pay plans in April as they vented anger over a £75 million payout for chief executive Jeff Fairburn.
Earlier this year, shareholders and politicians united to condemn what would have been an even higher £100 million payout, until Mr Fairburn voluntarily moved to calm the furore by handing back £25 million 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 £50 million in bonuses to quell the mounting anger.
The pay controversy led to the resignation of chairman Nicholas Wrigley and former remuneration committee chair Jonathan Davie late last year.
In a bruising encounter with MPs on the Business, Energy and Industrial Strategy Committee, Ms Sears was blasted for failing to know the average worker's pay at Persimmon, while chair Rachel Reeves branded the group's pay awards "egregious".
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."
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