More than 47 per cent of shareholders voted against appointing Mills as an non-executive director at the company's annual general meeting held at York race course – with 107m votes in favour compared with 96m against and 732,000 withheld.
Mills is a senior adviser at Citigroup, the US bank that also acts as Persimmon's financial adviser. As a result, Investor bodies including Institutional Shareholder Services (ISS) said they did not regard him as independent, with the latter telling shareholders to block the vote.
Chairman Nicholas Wrigley sought to reassure shareholders, saying: "The board strongly believes that Mills is independent and his appointment is in line with the provisions of the UK Corporate Governance Code. "
"He has not worked on the company's business in the last three years and has no other business relationships which would compromise his independence. Nevertheless given the significant minority who have voted against the resolution the chairman intends to meet shareholders to discuss this issue with them."
Persimmon also avoided a rebellion over pay after nine per cent of shareholders also voted against its remuneration report due to concerns over a scheme set up in 2012 that could hand out £600m to the company's top 130 directors.
The AGM took place as Persimmon reported an eight per cent rise in sales since the start of the year to £2.15bn. The group has sold 7,598 new homes into the private market with an average selling price of £220,000, up 5.8 per cent on the same period last year.
However, the performance did not impress investors, with shares falling by 5.5 per cent on fears of a slowdown in sales growth. Shares in other builders including Bovis, Berkeley and Bellway also fell as a result.
Shore Capital analyst Robin Hardy, said the numbers pointed to some loss of trading momentum: "While the trading update for the first quarter talks of progress it also strikes a few cautious tones. Site visitors numbers are up 12 per cent but this is less than the rate of growth in mortgage approvals, our proxy for overall market demand: these are up by around 20 per cent."