Jeff Fairburn has been sacked (or ‘asked to resign’) for taking a ludicrous bonus by the company that gave him said ludicrous bonus.
He is the target of public scrutiny, rightly, because a pay packet of £100m is absurd at any time, let alone in the midst of a housing crisis.
His response was mealy-mouthed as criticism grew – a lot of which may have died down had he just acknowledged that not only would the issue not go away, but people had a right to be offended by it.
Few if any of you reading this Briefing will be able to contemplate earning tens of millions in their lifetime, let alone what is turning into a £75m golden handshake (he volunteered a £25m cut).
But how much of this is due to greed and how much is due to Britain’s boardroom culture – particularly among the listed volume housebuilders?
From reports of faulty homes and the ground rent scandal, to corruption allegations and the sector’s response to Grenfell, the public’s trust in the housing sector appears to be at a low ebb.
This is at a time when housing providers who benefit from public incentives like Help to Buy are under pressure to deliver increased volumes, yet still seem unable to make a significant dent in the nationwide shortage.
While this isn’t necessarily the fault of housebuilders, it doesn’t play well with the general public.
It also lends weight not only to the need for more local authority / housing association building, but also to the build-to-rent sector, which is increasingly sophisticated and marketing itself to people put off homeownership.
The image of a man receiving this amount of money for hitting targets set by his board jars with the need to create a new housing story, where having rich parents or giving up avocado on toast seem to be the only ways for most people to afford a house.
Persimmon comes out of this badly, due in no small part to the way it has handled everything since it set the 2012 incentive plan behind Mr Fairburn’s bonus.
Blame can be widely attributed, from the people who signed off on this plan to the media ‘handler’ who interrupted a BBC reporter’s question to Mr Fairburn about the bonus (which seems to have been the final nail in his coffin).
Housing matters. Infrastructure matters. If you want to be a CEO of a company in the built environment, not only should you be prepared for public scrutiny, but the board around you should be too.
The people running these businesses that are responsible for putting roofs over people’s heads (or not, as the case may be) have a moral responsibility to do the right thing, and that means setting appropriate parameters on payment against performance.
Jeff Fairburn is entitled to a bonus and some of the opprobrium coming his way is less about the bonus and more about his impression of a cat that got the cream.
But when homelessness is rife, when people can’t afford mortgages, when building rates fall short despite government stoking demand (and profits) with Help to Buy, the leaders of these businesses must come under greater scrutiny.
A decade ago, major housebuilders including Persimmon were struggling as the global financial crash took its toll. In the first six months of this year, Persimmon made £516m.
The market is cyclical. Persimmon needs to remember how to both win and lose gracefully.