London house prices: Why Foxtons' chief executive Nic Budden's salary is jumping 19 per cent

 
Catherine Neilan
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Foxtons Prepare To Make Market Debut
Source: Getty

It's clearly paying to be in the London property market right now.

Foxtons' chief executive Nic Budden's basic salary is to jump 19 per cent for the current financial year, up to £550,000 from £461,000 last year.

It's an interesting move for the London-focused estate agent, coming as demand for homes in the capital falls, although there has been a spike in first-time buyer demand recently.

Foxtons said it was aware that "an increase of this magnitude is unusual", but said the decision had been taken after "careful consideration and consultation with key shareholders".

The main reason appears to be that when Budden was appointed to the board in July 2014, his remuneration was set at relatively low levels. Budden was parachuted in after former chief executive Michael Brown stepped down after 12 years for personal reasons.

"Since then, [Budden] has demonstrated strong leadership and has handled well the increasing complexity and size of the business," the estate agency said.

On top of his basic salary, annual bonuses for 2016 will be changed, raising the upper limit from 125 per cent of Budden's salary to 150 per cent "to further strengthen the annual performance incentive".

This year all executive directors' bonuses will be based 60 per cent on profit, 20 per cent on organic growth - which includes the successful opening of new branches on time and on budget - and 20 per cent on objectives.

"The committee believes the introduction of an element on personal/strategic objectives will help reinforce delivery of annual business priorities," Foxtons said.

The London-focused firm paid Budden a total of £856,000 for his work in 2015 - his first full year as chief executive - of which £461,000 was salary and fees and £297,000 was bonus.

Chief financial officer Gerard Nieslony pocketed £515,000, up from £395,000 in 2014, with his bonus soaring from £69,000 to £181,000.

In 2015, both men were gifted bonuses equivalent to 64.4 per cent of their salary, compared with 2014 when their awards were equivalent to 25 per cent.

Will they receive a decent performance-related boost to their pay this time next year? Perhaps if they focus on East London rather than central...

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