The fate of under-fire Persimmon boss Jeff Fairburn was finally sealed this morning, with the chief executive resigning in the wake of one of the most heated corporate pay rows since the financial crash.
Fairburn, who was the UK’s highest paid boss in 2017, is to leave at the end of the year “at the request of the company”, which has faced mounting pressure from both its investors and the public over the chief executive’s £75m bonus.
York-based Persimmon, which is the UK’s second largest housebuilder and a FTSE 100 member, said that Fairburn’s remuneration had been a distraction and that it continued to have “a negative impact on the reputation of the business and consequently on Jeff’s ability to continue in his role.”
Such remarks come several weeks after Fairburn took part in a car crash TV interview in which the boss refused to answer questions about his bonus, prompting widespread public anger.
“This was Fairburn’s Icarus moment” according to property expert Henry Pryor. “He flew too close to the sun, like Fred Goodwin, and it has ended in disaster”.
Pryor added: “He lost the confidence of shareholders and the goodwill of the public…This is a PR cock-up.”
Managing director David Jenkins is now set to replace Fairburn, who has been at the housebuilder for almost three decades.
One major observer of the London property market, who wished to remain anonymous, told City A.M: “When I heard the news this morning, I thought about a lot of the situations we have had like this. It’s the usual old thing – he’s been highly successful but this isn’t America, and our business and social environment doesn't hold very well when people are being paid these big bonuses”.
He added: “The guy isn't walking round with a £75m wodge in his back pocket as lots of it is owned through shares, but all people see is the headline figure. It’s never explained properly, but at the end of the day his team should have known what the reaction to this would’ve been.”
Persimmon said it would not be looking to retrieve any of Fairburn’s £75m bonus, although he will not receive salary and pension payouts after 31 December.
Investment group Shore Capital predicted today that Persimmon “will not be adversely affected by this change, in our view, and we do not believe that the chief executive’s position has been any material drag on the stock valuation. A small bounce possible today but we would expect the shares to remain close to our fair value”.