Prominent private investor activist group ShareSoc is urging shareholders to unsettle the foundations of housing group Berkeley by voting against what it calls an "excessive" remuneration policy.
The London-focused housebuilder has seen its share price more than treble since it introduced its long-term incentive plan in 2011 from £8 to £27, but ShareSoc argues the subsequent payout is likely to be more than £400m.
"The plan was approved by shareholders in 2011 and it may be considered too late to do anything about that decision, except to highlight that at the time this cyclical business was towards the bottom of the cycle," ShareSoc said.
"Shareholders who supported the plan should have examined it more carefully and should have seen the large potential dilution that will result."
ShareSoc said it was "surprised" executive chairman Tony Pidgley was given an increase in salary given his "huge equity incentive", which includes options on roughly 5m shares, and criticised the decision to have an executive chairman and chief executive. It said most companies with the former eschew the latter.
ShareSoc claimed their salaries - Mr Pidgley's basic £850,000 and chief executive Rob Perrins' basic £515,000, according to Berkeley's annual report - was £600,000 higher than a "more normal combination of a non-executive chairman and chief executive". It said a non-executive chairman would be a fraction of the cost.
In its annual report, Berkeley says its remuneration policy aims to "encourage, reward and retain the executives and ensure that their actions are aligned with the company's strategy".
An advisory shareholder vote will take place on 6 September.
