After criticism of its huge payout plans, Persimmon (LON: PSN) will cut the bonus for the top three executives by £51 million.
Housebuilding group will now pay chief executive Jeff Fairburn a bonus of £75 million instead of £100 million under its long-term incentive bonus plan.
The cut has come following criticism from groups including Aberdeen Standard Investments, who called the pay package “grossly excessive”.
Politicians and the boss of rival housebuilder Redrow (LON: RDW), Steve Morgan, have also commented on the number of bonuses provided by Persimmons, who called Fairburn’s bonus as “very, very wrong”.
Liberal Democrat leader said: “It is reminiscent of the worst excesses of corporate greed that helped to create the financial crisis, when short-termism was heavily incentivised and long-term planning ignored,”
“This is also a perverse situation where a corporate fortune has been built on what is essentially a government subsidy in help to buy. This situation shows just why help to buy is so flawed: it fuels demand rather than supply, putting house prices even further out of reach of young people, while adding zeros to the bank balances of housebuilding executives.”
Last year, the Guardian revealed that the chief executive’s pay deal could pay for a council house for every homeless family in Yorkshire, which is where the company is based.
Fairburn said earlier this month: “It’s now clear that this belief was misplaced and so I am making my plans public and recognise that I should have done so sooner. I am setting up a private charitable trust which I plan to use to benefit wider society over a sustained period of time by supporting, in a very meaningful way, my chosen charities.”
Persimmon’s share price has risen from £4 in 2012 to £24.50 today.
The row over the bonus payments resulted in Nicholas Wrigley stepping down as chairman in December.
Wrigley said he regretted not capping Persimmon’s bonus scheme and was leaving “in recognition of this omission”.
Persimmon’s chairman and senior independent director have both quit the board over the controversial bonus scheme, which is believed to be Britain’s most generous ever bonus scheme.