The boss of housebuilder Persimmon has vowed to hand a ‘significant slice’ of his pay packet to charity after facing stinging criticism over his £100 million bonus.
Chief executive Jeff Fairburn said he always intended to give a ‘substantial amount’ of his triple-digit award to charity, and ‘regrets not making his feelings public sooner’.
The under-fire chief executive said he will now set up a private charitable trust to support a number of charities selected by himself and his family.
Critics argued Mr Fairburn’s bonus has been massively inflated by Help to Buy – the Government scheme launched in 2013 which uses taxpayers’ money to help first-time buyers get on the housing ladder.
More than 50 per cent of Persimmon’s sales are through Help to Buy and by the end of last year, its share price had soared by more than 200 per cent since 2013.
In December, Liberal Democrat leader Sir Vince Cable branded Fairburn’s bonus ‘obscene’, while former Tory Minister Steve Norris said it was ‘hard-pressed taxpayers’ who had made Fairburn and other housebuilding bosses so rich.
Polly Neate, chief executive of homeless charity Shelter, meanwhile, said housebuilding companies were ‘taking huge profits from a housing crisis hurting millions’.
In a personal statement, Mr Fairburn said he ‘profoundly regretted’ how the controversy surrounding his bonus had ‘eclipsed’ Persimmon’s strong performance.
He said: ‘Persimmon’s success as a business and the uncapped nature of the scheme has meant that the value of these awards has become very large.’
Defending his position, he said the introduction of the bonus scheme pre-dated his appointment and he had not sought out the bumper pay awards.
He added: ‘Once it became apparent that our outperformance would lead to a very significant award for me, I made plans to use a substantial proportion of the total to support the charities that are particularly important to me and my family.
‘But, in what might be considered to be an old-fashioned approach, I believed that this was a personal matter and that I would be able to do this privately.
‘It’s now clear that this belief was misplaced and so I am making my plans public and recognise that I should have done so sooner.’
While the LTIP was approved by 85% of shareholders in 2012, the criticism engulfing the company forced chairman Nicholas Wrigley and remuneration committee chairman Jonathan Davie to resign late last year.
Mr Fairburn became eligible for £40 million of the payout on New Year’s Eve.
It is part of a wider £800 million award, linked to profit and housebuilding targets, to be shared among management.
Stefan Stern, director of independent think tank the High Pay Centre, said: ‘Mr Fairburn has said ‘substantial’, but we don’t know what that means and he might come under pressure to be more precise.
‘You could argue that £200,000 is a substantial amount, but that would not make a dent in his bonus.
‘This tells us that shame and embarrassment still matter. He has been shamed into doing it.
‘It is an encouraging sign that some things are intolerable and shameful and have to be reversed.’