Persimmon pay shambles shows need to ban long-term bonus plans
Persimmon chairman Jeff Fairburn’s £110 bonus is an extreme example, but the whole long-term bonus system is rotten
Jeff Fairburn, the £110m chief executive of Persimmon, will have reflected long and hard about how it looks to receive such an enormous personal windfall at a time when executive pay and housebuilders, with their share prices inflated by help-to-buy subsidies for homebuyers, are in the political spotlight.
He will have noted that Persimmon’s chairman, and the head of the remuneration committee, resigned last month out of shame or embarrassment. The duo conceded, in effect, that they made a colossal error when they designed the 2012 incentive without putting a cap on rewards. They may also have been trying to exert some moral pressure on Fairburn and his executive colleagues to give up some of the gains or make a hefty public donation to charity.
Source: The Guardian