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April 2013

Housebuilder Persimmon’s AGM takes place at York Racecourse on Thursday, April 18, but for the company’s management this will be no gamble. Last September, shareholders were persuaded to approve what the board has called a ‘long term incentive plan’ and now the remuneration report reveals that virtually all available grants have been made. UKSA’s detailed analysis of the LTIP shows that the so-called incentive is almost non-existent and these grants are little better than gifts.

One third of the grants have been made to just four executive directors – one of whom will retire at the AGM. These include a ‘golden goodbye’ to the retiring CEO (worth £4m at the present market price of Persimmon’s shares), which makes nonsense of what is supposedly a long term incentive scheme. Furthermore, although the report follows mandatory guidelines, the full cost of the scheme is hidden from those shareholders not prepared to undertake laborious analysis, yet this is precisely what the institutional shareholders are now expected to do and in this instance appear, in the main, to have failed.

UKSA calls on Aberdeen Asset Managers, BlackRock Investment Management, Franklin Templeton Investments, Legal & General and other institutional investors who failed to stop the LTIP’s abuse of shareholder funds to vote now to reject Persimmon’s remuneration report.

The press release and letter to institutional shareholders are attached below, together with an analysis of the Persimmon's LTIP scheme by a member of UKSA's policy team and correspondence between UKSA and Persimmon Chairman Mr. Nicholas Wrigley.

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