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Persimmon pay panel chief unable to tell MPs firm’s average pay | Business

Posted by Angela Monaghan on 6 June, 2018
| 0

Persimmon’s executive pay row was reignited on Wednesday after the head of the housebuilder’s remuneration committee said she did not know how much the average worker was paid by the firm.

MPs on the business, energy and industrial strategy (BEIS) committee were stunned by the admission from Marion Sears, who was giving evidence after Persimmon angered shareholders earlier in the year by handing its chief executive Jeff Fairburn a £75m bonus.

“The average … I don’t have that figure to my finger tips,” Sears told MPs, when asked by the committee chair, Rachel Reeves, what average pay was.

“You’re chair of the remuneration committee at Persimmon aren’t you? And you don’t know what average pay is, as chair of the remuneration committee?” asked an incredulous Reeves.

After the meeting had concluded, the Labour MP tweeted that Sears’ lack of knowledge was a disgrace.

Rachel Reeves

A company that can afford to pay its Chief Executive £45m should know what the average wage of an employee in its business is. Answers from Persimmon a disgrace.

June 6, 2018

She added in a statement: “Executive pay at Persimmon is a tale of corporate greed and incompetent pay management, financed on the back of a tax-payer funded housing scheme [help to buy].

“Persimmon paid out huge bonuses to the men at the top of the firm and yet this morning we have heard that Persimmon are unable to tell us how much average workers at the company are paid.”

A spokesman for the firm later confirmed the average salary at the firm is £35,600.

During the bruising session, Sears also appeared confused about the sum Fairburn received last year, at first answering “£675,000”. Prompted by Reeves to give the total pay figure, she said it was “about £45m”. The total figure shown in the 2017 annual report and accounts was £47.1m.

When asked by Reeves whether or not Persimmon was a living wage employer, Sears said yes, but then went on to clarify that the FTSE 100 firm was not accredited by the living wage foundation.

“If Persimmon can pay their chief executive £45m, they must ensure they pay all their staff the living wage,” Reeves said. “As a committee, we shall continue to take a close eye to the issue of corporate pay and examine what impact government action, such as pay-ratio reporting, and new regulatory guidance is likely to have on delivering fair pay.”

Persimmon was subject of a major shareholder revolt in April over a £75m bonus handed to Fairburn.

Fairburn collected the first £50m worth of bonus shares on 31 December and will collect the remainder of his long-term incentive plan share award on 1 July.

He had been due to collect a total of £110m worth of bonus shares, but agreed to forgo 50% of the second half of the award following intense criticism.

Despite anger over the level of pay, the policy was narrowly approved by shareholders as nearly a third abstained from the vote and of those who voted, 51.5% cast in favour and 48.5% against.

Sears conceded to MPs that the pay row had become a debacle and admitted Persimmon had made mistakes.

She said: “We would have handled it better if we’d have had earlier and more joined up communication with shareholders. I think our communication was right in the end but it was late and that wasn’t good.”

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