The Persimmon Story

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Shares in Persimmon plc have been rising (as have most housebuilders’ recently), so its shareholders will be happy. But something has happened which may leave its shareholders far from happy in the future, even though the majority voted for it. It’s called a ‘long term incentive plan’, or LTIP for short.
UKSA does not object to LTIPs in principle, but we did object to this plan when we heard of it, because of its extreme generosity to the company’s managers at the expense of its owners, the shareholders. UKSA’s policy team has looked closely into the plan and our conclusions can be found here. They raise two matters of major concern, one for Persimmon’s shareholders and the other for all shareholders.
• Investors in Persimmon need to be aware that the LTIP could result in a depleted land bank and reserves at the end of the ten year period.
• All private investors need to know that the much vaunted ‘engagement’ of major shareholders in their investee companies, particularly in matters of pay, which is being sought by the government, through its Financial Reporting Council, as an alternative to empowering private shareholders, cannot be relied upon to protect their interests.
Nicholas Wrigley, Persimmon’s chairman, has declined to answer questions put to him by UKSA. Our letter to Persimmon's Chairman and the LTIP details can be viewed below.

UKSA Analysis and Correspondence with Persimmon Chairman

LTIP details

LTIP analysis by UKSA

First letter to Persimmon Chairman

Chairman's reply to UKSA

Second letter to Persimmon Chairman