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Persimmon boss exits over bonus outrage

Persimmon has asked its chief executive officer Jeff Fairburn to leave the housebuilder following the outrage over his bonus package.

In a statement to the City, the housebuilder said the focus on Mr Fairburn’s £75m 2017 bonus payment had become a “distraction” that was having a negative impact on Persimmon’s reputation and his ability to continue.

Managing director David Jenkinson has been appointed interim CEO and will take up the position on 31 December.

Persimmon said its board had also began the process of selecting a permanent successor.

Mr Fairburn was handed a £100m bonus in 2017 – later reduced to £75m – as Persimmon’s turnover and profit soared, driven in part by the government’s Help to Buy initiative.

The size of the award proved controversial with shareholders and was followed by two directorial resignations from the firm’s remuneration committee, including the housebuilder’s chairman Nicolas Wrigley.

The executives resigned over the failure to cap an incentive scheme that was responsible for the huge bonus payments. 

Despite the controversy, in April Persimmon shareholders narrowly voted in favour of a pay deal that saw Mr Fairburn receive a £75m bonus.

Following the vote – carried by 51.5 per cent for versus 48.5 per cent against – one of the firm’s largest shareholders, Aberdeen Standard Investments, warned the company was risking “reputational damage” from handing out “grossly excessive” pay deals.

Meanwhile housebuilder Redrow has also announced a major departure.

Chairman Steve Morgan will retire from the business at the end of March 2019, having founded the housebuilder in 1974.

He stepped down as chairman in November 2000 only to return to the role in March 2009 to address the losses the business suffered in the wake of the financial crisis.

During his spell away from the firm Mr Morgan bought Wolverhampton Wanderers FC, which he owned from 2007 to 2016.

Mr Morgan will be succeeded as executive chairman by John Tutte, Redrow’s current group chief executive.

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