Backing for Persimmon payout scheme

Investors yesterday approved the housebuilder’s incentive plan with an 85 per cent majority.

However, about 15 per cent of votes, almost 33m shares, were cast against the plan at the meeting in York.

The York-based housebuilder plans to plans to reward senior managers with options under plans to pay out £1.9bn to shareholders over the next decade.

In February, Persimmon unveiled the dividend payout scheme totalling £6.20 per share over the next nine and a half years – which it intends to achieve without piling debt onto its balance sheet. Under the new long-term incentive plan (LTIP) about 140 senior managers, including executive directors, will be granted options based on the success of the capital return plan.

Options offer the right to purchase shares at an agreed price. Under Persimmon’s plan, the price of the options will start at £6.20, but will decrease by a sum directly corresponding to the amount the group pays out in dividends.

That means their price could fall to zero if the payout plan is completed fully by the end of 2021.

Chairman Nicholas Wrigley said it will provide “a closer link between reward to executive directors and senior management for the successful implementation of our strategy”.