Persimmon (PSN) chief executive Jeff Fairburn is to step down at the request of the board, due to the uproar surrounding his remuneration package, which has damaged the housebuilder's reputation. Under the terms of a 2012 long-term incentive plan (LTIP) – which was approved by 84.9 per cent of the shareholders who voted – Mr Fairburn was due to receive around £100m in remuneration, as the group's share price benefited from soaring demand for new homes thanks to the government's Help to Buy scheme. That was later reduced to around £70m after Mr Fairburn created a charitable trust, waiving part of the incentive package as well as forgoing his 2018 bonus.
Chairman Roger Devlin said that "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 a change of leadership".
The housebuilder also confirmed that as Mr Fairburn is leaving at the company’s request it will still have to pay out shares awarded under the plan, but he will have to hold these until 6 July 2021. All other awards will lapse on his departure. Group managing director David Jenkinson will be appointed as interim chief executive when Mr Fairburn leaves on 31 December. Persimmon also released an update on current trading that showed private sales up by 3 per cent in the period starting 21 August, while the forward order book is ahead by 9 per cent.
There are also changes at Redrow (RDW), where chairman and founder Steve Morgan is set to retire (again) in March 2019. Mr Morgan returned to the business in March 2009 to mastermind its recovery in the wake of the financial crash. Recent trading has been difficult in the London market, while sales outside the capital remain healthy. Selling price reservations were up 4.6 per cent in the first 18 weeks of the current financial year, while the forward order book is up 11 per cent.
