Persimmon chief says he deserves £110m bonus

The chief executive of housebuilder Persimmon has insisted he deserves his £110m bonus because he has “worked very hard” to reinvigorate the housing market.

Jeff Fairburn collected the first £50m worth of shares on New Year’s Eve from the record-breaking bonus scheme that has been described as “obscene” and “corporate looting”. He will qualify for another £60m of profits from the scheme this year.

Speaking for the first time since the award was confirmed, he repeatedly refused to state whether or not he intends to donate any of the money to charity.

“I consider my plans for any charitable giving to be a private matter and I do not wish to comment any further on that,” Fairburn said.

“You’ve got to put this into context of what has been achieved. I do fully accept that the potential payouts under the scheme for top individuals are very significant.“The scheme is about 140 individuals, and it’s always a team effort,” he added. “Of course I’m responsible at the end of the day and the business has done very well. We’ve worked very hard as a team to get to where we are now, and we continue to be invigorated and we continue to push the business forward.”

The scheme – believed to be Britain’s most generous-ever bonus payout – will hand more than £500m to those 140 senior staff. More than 80 are expected to receive payouts in excess of £1m. The finance director, Mike Killoran, is to receive £86m and the managing director, Dave Jenkinson, is in line for £48m.

The scale of Fairburn’s bonus has drawn criticism from politicians, charities and corporate governance experts. Vince Cable, the Liberal Democrat leader, said the “scale of this bonus is obscene”, adding that it was an outrage that Fairburn could profit so much from a “government subsidy” – a reference to the help-to-buy scheme introduced in 2013 by former chancellor George Osborne to help homebuyers.

More than half the homes sold by York-based Persimmon last year went to help-to-buy recipients, meaning government money helped finance the sales. Persimmon’s share price has nearly tripled since help to buy launched in April 2013.

“It is reminiscent of the worst excesses of corporate greed that helped to create the financial crisis, when short-termism was heavily incentivised and long-term planning ignored,” Cable said.

Garry White, the chief investment commentator at the stockbroker Charles Stanley, said the scale of the bonuses meant the Persimmon management “could easily be accused of corporate looting”.

Persimmon’s chair, Nicolas Wrigley, resigned last month stating that he regretted not putting a cap on the bonus scheme and was leaving “in recognition of this omission”. Wrigley is understood to have put pressure on Fairburn to donate some of his bonus to charity.

The Guardian has calculated that just a fraction of Fairburn’s bonus could build enough homes to end homelessness in York. A donation of £4.6m – just 4% of Fairburn’s bonus – could provide a home for all of the 58 homeless families in the city.

Fairburn said he was “very proud” of the charitable causes Persimmon supports but was unable to name any of the charities.

The company donated £1.1m to charity last year, far below the average FTSE 100 company donation of £3.8m.

In a trading update on Tuesday, Persimmon said it had sold 16,043 homes last year for a total of £3.42bn, a 9% increase on 2016. As a result of the increase in sales, “we anticipate our pre-tax profits for the year will be modestly ahead of market consensus”, the company said.

Analysts expect the company to post a 20% increase in full-year profits to about £957m, according to a poll by Thomson Reuters. Persimmon will publish its full-year results on 27 February.