The chief executive of Persimmon, Jeff Fairburn, has been asked to leave the company following the ongoing outrage over his £75m bonus payout
Fairburn’s £75m bonus payout had become a “distraction” and had damaged the firm’s reputation.
The decision brings Fairburn’s 29-year career at Persimmon to an end, as the housebuilder seeks to draw a line under the public row over his pay.
In April, Persimmon shareholders branded the payout “grossly excessive” and the bonus was also criticised by politicians, charities and corporate governance experts.
Announcing his departure, the company said on Wednesday: “Jeff has been a successful leader of the business since his appointment in 2013, but the board believes that the distraction around his remuneration from the 2012 LTIP (long-term incentive plan) scheme continues to have a negative impact on the reputation of the business and consequently on Jeff’s ability to continue in his role.”
Roger Devlin, Persimmon’s chairman, said: “Given the continuing distraction around the scale of his remuneration resulting from the 2012 LTIP, the Board believes that it is now necessary for there to be to be a change of leadership”.
However, he also pointed out that the company’s stock market value had doubled since Fairburn took over in 2013, to £7.5bn.
Devlin, who was appointed chairman in June, also said that under his tenure the company had handed more than £2.2bn to shareholders.
Fairburn will stay on at Persimmon until the end of the year, at which point he will be replaced as interim chief executive by David Jenkinson, currently managing director, until a permanent replacement is found.
Persimmon added: “Whilst the company has sought to mitigate the entitlement falling due to Jeff, as Jeff is leaving at the company’s request, legal advice has confirmed that the company does not have any discretion to withhold or seek forfeiture over any of the ‘restricted’ 2012 LTIP shares, although these continue to be required to be held until 6 July 2021.”
Fairburn will not receive salary and pension payouts after 31 December.