Investor revolt over pay packages at Persimmon

The vote followed advice by shareholder activist group The UK Shareholders’ Association (UKSA) to reject the remuneration report.

UKSA said the long-term incentive plan for senior managers at the York-based housebuilder was little better than a “gift” of shares.

Persimmon claimed the plan aligned managements’ interests with “challenging” targets.

The housebuilder has plans to build more than 600 homes for rent, the latest in a wave of investors looking to profit from the growing rental market.

Recent Government pledges to support the market is attracting a number of institutional investors and developers.

In the current economic climate many people are having to rent homes as they can’t afford to buy them.

Earlier this week Persimmon, Britain’s largest housebuilder by stock market value, was among 45 companies shortlisted by the Government as potential beneficiaries of a £1bn pot to help fund the construction of rental homes.

Chief executive Mike Farley said: “We’re seeing that there is some demand throughout the country for people who need to rent. Not everyone wants to buy.”

He said the Government support makes it financially viable for both Persimmon and for institutions.

This will be the first time Persimmon had built rental homes.

The homes will form part of 16 schemes Persimmon is building across the UK.

Up to 10 per cent of each scheme, or about 40 to 50 homes, will be rented out, while the rest will be sold.

Mr Farley said the company is in discussions with various institutions, including insurers and pension funds, to partner on the schemes and assist with financing and the management of the homes. It will start work on the projects later this year.

Insurers and pension funds are preparing to spend £7bn on the properties

Persimmon told shareholders yesterday it would pay out a dividend of 10p per share to shareholders in June next year, accelerating a payment originally scheduled for 2015 under the plan set out last year to distribute a total of £1.9bn over a nine-and-a-half-year period.

The company said it has seen a “good start” to 2013 with visitor levels up five per cent in the first 15 weeks of the year.

Cancellation rates have improved slightly from 17 per cent to 16 per cent.

The group has already opened 52 of the 90 new sites scheduled for the first half of 2013.

Its outlet network currently stands at 385 sites and it anticipates having around 390 sites offering new homes to customers by June, in line with previous guidance.

House purchase enquiries were up 30 per cent on last year, having already risen 24 per cent before the Government unveiled its scheme in March to help struggling homebuyers.

Its current total forward sales are up 11 per cent at £1.38bn.

Chief executive Mike Farley retired at the group’s AGM yesterday.

He will be succeeded by Jeff Fairburn, who joined Persimmon 23 years ago.

Last year Persimmon revealed plans to reward senior managers with options worth up to 10 per cent of the company if it met a plan to pay out £1.9bn to shareholders over the next decade.

In February 2012, Persimmon unveiled a dividend payout scheme totalling £6.20 per share over the next 9.5 years – which it intends to achieve without piling debt on to its balance sheet.

Under the long-term incentive plan (LTIP) about 140 senior managers will be granted options based on the success of the capital return plan.

UKSA claims Mr Fairburn could take his total number of shares from 2.4m to 4.6m when he becomes chief executive.

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