Persimmon – AGM 29 April 2020
Item 3: Remuneration policy
ECGS notes the remarkable effort to restore the confidence in the executive pay after scandal about sky-high LTI vesting in 2017 and 2018. However, our major concern remains and the shareholder distribution will be used as one of three LTI metrics. An unknown part of the LTI will be based on direct shareholder distributions made by the Company (cash and share dividends). This is inherently an aspect under the direct control of the CEO and there is a potential threat that unsustainable shareholder distributions could be made at the expense of longer-term investment in Company assets. Such concerns are somewhat mitigated by the underpinning conditions included. However, the historical payouts and problems with the quality of homes prove that the shareholder distribution is an unsustainable, risky and thus inappropriate measure for an LTI. Shareholders may question why Persimmon has not chosen an other measure from the Company's KPI.
Update from 2 April 2020
Salaries and fees cut by 20% and any 2020 cash bonuses are forgone. ECGS welcomes this decision and will assess its sufficiency very carefully while approving the next 2020 remuneration report.
Item 17: Share buyback
As shareholder distribution is used as LTI measure, we do not consider appropriate to support this authorisation.
Persimmon is a holding company, engaged in house building, constructing a range of homes across England, Scotland and Wales. Co. trades under the brand names of: Persimmon Homes, which delivers a range of new homes from apartments to large family homes throughout the U.K.; Charles Church, which complements Persimmon by delivering executive housing in premium locations across the U.K.; Westbury Partnerships, which focuses on affordable social housing. Co. sells these homes to housing associations across the U.K.; and Space4, which operates an offsite manufacturing plant producing insulated wall panels and roof cassettes as a fabric first solution to the construction of new homes.
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