Persimmon (PSN) has come under fire from Royal London Asset Management again, as the housebuilder is set to pay out £600m over the next five years through its management incentive scheme. This is the largest award outside the banking sector, and is the latest in a line of pay deals under the spotlight.
When the scheme was put in place in 2012, any payout was dependent on management achieving a set of what, at the time, seemed to be a tough set of targets. These have been more than met as the economic recovery boosted the housing sector from very low levels of activity. Put into context, since 2010 the dividend payout has risen from 7.5p a share to 110p, with a promise to pay 110p every year through until 2021. Over the same period, the share price has risen from 281p to 1,905p, so it's open to debate exactly how much there is to complain about.
Shareholders (a majority of whom voted in favour of the incentive plan) have received £1bn in dividends since the scheme was introduced, while the commitment made in 2012 to return 620p a share in dividend by 2021 was increased earlier this year to 900p a share (£2.8bn).
