Britain’s highest paid CEO quits amid bonus controversy

Persimmon chief executive Jeff Fairburn – the UK’s highest paid CEO – is being forced out amid an ongoing row and backlash over his controversial £75m bonus.

Britain’s second-biggest housebuilder said controversy surrounding Mr Fairburn’s bonus was a continuing distraction which had hit the company’s reputation.

Persimmon said that, as Mr Fairburn has been asked to leave by the company, it is not legally able to withhold any of the share payouts due under the controversial long-term bonus scheme.

His last day will be December 31, as the housebuilding giant looks to distance itself from the controversy over his huge payout.

Mr Fairburn was Britain’s highest paid CEO in the financial year ending 2017, according to a survey, receiving £47.1m – more than 20 times his pay in 2016. It was largely due to a long-term incentive plan dating back to 2012.

He has faced criticism in the media over his bonus and had hoped to draw a line under the issue with plans to waive some of it and set up a charitable trust.

But just a few weeks ago he hit the headlines again after refusing to answer questions from a journalist about the size of his pay packet.

He said in a statement on Wednesday: "It is clearly now in the best interests of Persimmon that I should step down."

Mr Fairburn will leave the company on December 31 and will be replaced on an interim basis by Group Managing Director David Jenkinson whilst the board finds a permanent successor.

Persimmon said the decision for his departure was "by mutual agreement and at the request of the company".

It added: "The board believes that the distraction around his remuneration from the 2012 LTIP (long-term incentive) scheme continues to have a negative impact on the reputation of the business and consequently on Jeff’s ability to continue in his role."

Persimmon said that, as Mr Fairburn has been asked to leave by the company, it is not legally able to withhold any of the share payouts due under the controversial long-term bonus scheme.

But it said it has agreed with Mr Fairburn to cut his 12-month notice period and said he will not receive any further salary or benefits after December 31.

He has no bonus entitlement for 2018.

Chairman Roger Devlin said: "Given the continuing distraction around the scale of his remuneration resulting from the 2012 LTIP (long-term incentive plan), the board believes that it is now necessary for there to be to be a change of leadership."

Mr Fairburn said: "I had hoped that revealing my plans to create a charitable trust and to waive a proportion of the award would enable the company to put the issue of the 2012 LTIP behind it.

"However, this has not been the case and so it is clearly now in the best interests of Persimmon that I should step down."

Mr Fairburn’s pay packet sparked outrage among politicians and shareholder earlier this year.

His mammoth £75m payout would have been an even higher £100m, until Mr Fairburn voluntarily moved to calm the furore by handing back £25m in bonuses.

He also pledged to forego his next annual bonus and hand over a "substantial amount" of his pay award to charity.

Other executives also picked up bumper pay deals under the lucrative share scheme, collectively worth more than £100m.

The group saw 48.5 per cent of investors vote against the pay plans in April as they vented anger over the payouts.

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