Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Persimmon chairman quits over boss's £100m bonus

Persimmon chairman quits over boss's £100m bonus

Nicholas Wrigley has quit as chairman of Persimmon (PSN) over his role in the company's incentive structure that is set to hand chief executive Jeff Fairburn a £100 million bonus.

Persimmon announced Wrigley's departure, citing the 2012 long-term incentive plan (LTIP).

Remuneration committee chairman Jonathan Davie is also leaving the business over the payout.

'The board believes that the introduction of the 2012 LTIP has been a significant factor in the company's outstanding performance over this period, led by a strong and talented executive team,' said Persimmon in a statement to the market.

'Nevertheless, Nicholas and Jonathan recognise that the 2012 LTIP could have included a cap. In recognition of this omission, they have therefore tendered their resignations.'

Under the plan, Fairburn has more than 4.8 million in share options in Persimmon. Given the £26.23 share price, once exercised those shares will be worth £127 million.

The price Fairburn will pay for the shares depends on the amount Persimmon has paid out to shareholders in dividends under its 10-year plan, launched in 2012 to deliver £6.20 per share, with higher dividend payments resulting in a lower exercise price.

Persimmon has been running well ahead of schedule in the payment of dividends, with £4.85 already paid out over the last five years.

Fairburn will be able to exercise 40% of his options on New Year's Eve, with the remainder when the £6.20 target is reached.

According to Reuters, Fairburn could net a £100 million profit from his options.

Shares in Persimmon were down 23p this morning on the news. The FTSE 100 rose 13 points, or 0.2%, to 7,462.

Outside the FTSE 100, shares in small cap LED maker Luceco (LUCE) crashed 45% to 128p after the company said profits would be £3.5 million lower than expectations at £13.2 million.

The group said margins had weakened, an issue that had not been identified sooner due to 'an incorrect assessment of the value of the group's stock'. Financial controller Ian Pritchard has resigned as a result.

Joining Luceco at the bottom of the FTSE Small cap index was SDL (SDL), down 24% at 350p after the software firm issued a profit warning due to delays in the closure of a number of deals.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Hugh Young: the buck stops with me on Asia recovery

Hugh Young: the buck stops with me on Asia recovery

The Veteran Asia Pacific fund manager discusses how he is going to improve the performance of Aberdeen Standard Asia Focus and the other investment trusts run by his team.

Play Tim Steer: fund managers will have to get 'stuck in'

Tim Steer: fund managers will have to get 'stuck in'

The second part of our film with former Artemis and New Star fund manager Tim Steer looks at how his profession has evolved over the past two decades.

2 Comments Play Tim Steer: how to spot a stock disaster coming

Tim Steer: how to spot a stock disaster coming

The former Citywire AAA-rated fund manager has written a book on 22 stock disasters and how forensic examination of annual reports could have spotted them coming.

Read More
Your Business: Cover Star Club

Profile: what this duo did after quitting Hargreave Hale

Profile: what this duo did after quitting Hargreave Hale

Two former Hargreave Hale staffers left following its purchase by Canaccord, but insist their move was due to a long term structural industry shift

Wealth Manager on Twitter