The chairman of housebuilding company, Persimmon, Nicholas Wrigley is to step down from his post once a successor has been found and Jonathan Davie, senior independent director and chairman of the remuneration committee resigned after taking responsibility for the lack of a cap on the firm’s long-term incentive plan (LTIP).

Persimmon said it had introduced the LTIP in 2012 and the company’s board believed that the introduction of the 2012 LTIP had been a significant factor in the company’s outstanding performance over this period, led by a strong and talented Executive team.  

The company added: “Nevertheless, Nicholas and Jonathan recognise that the 2012 LTIP could have included a cap.  In recognition of this omission, they have therefore tendered their resignations.“

Manifest’s remuneration analysis in advance of Persimmon’s AGM in April this year gave the company a low-grade E highlighting that the payouts that were set to be delivered to executive directors under the LTIP were grossly excessive. Other concerns were that the LTIP performance measures used absolute targets and only one LTIP metric was used for awards made during the year. Manifest also highlighted issues in the 2017 share plan proposed at the AGM. 

The company said that Nigel Mills, member of the remuneration committee, had been appointed the senior independent director and would lead the process of appointing a new chairman.  Marion Sears was appointed the chairman of the remuneration committee.

Manifest does not consider Mills, a senior advisor at Citigroup Global Markets, to be an independent non-executive director because of Citigroup’s role as a broker for the company. In 2016 there was a 47.5% vote against Mill’s re-election. Following this vote the company met with investors to explain why they believe he is independent.

Persimmon stated in its annual report: “The Chairman made clear that Citigroup, whilst one of Persimmon’s two brokers, are not financial advisors to the Company and have received no remuneration from the Company for more than eight years, and received share dealing commission only in the two years before that. Nigel had not worked on the Company’s business over the three years prior to his appointment last year, itself preceded by Citigroup’s decision to put in place strict procedures which further ensure his independence.”

There was a 10% vote against the remuneration report at the 2017 AGM – which would not have been high enough to be listed on the forthcoming public register of listed companies encountering shareholder opposition as it is due to disclose dissension of 20% and above. In previous year’s there has been more opposition to the Persimmon’s remuneration report – in 2013 the advisory remuneration vote only managed to achieve 78% support and was one of the highest dissenting votes that year. Persimmon’s remuneration policy received 97% backing in 2017. 

Last Updated: 15 December 2017