The public will have been shocked by the revelation that Persimmon management are in line for a payment of £600million. This is no surprise to UKSA, who warned of this outcome when the Persimmon Long Term Incentive Plan (LTIP) was installed in 2012 and have since continually promoted the regulatory changes necessary to prevent this and similar abuses.
UKSA notes the following:
• The ‘single figure’ reported for director’s pay includes precisely zero in respect of this LTIP.
• The Remuneration Report is incomprehensible as a description of the likely and potential outcomes of this LTIP.
• The Remuneration Report does not contain information to allow any estimate of likely outcomes of this LTIP to be made. That requires an examination of the original terms of the Plan.
• The original terms of the Plan are not available on the corporate website. They are on this website here.
The directors of Persimmon cannot be blamed for dipping their hands into an open cookie jar. They have acted properly under the regulations, though perhaps more in the letter than the spirit. The fault lies in the regulations themselves.
UKSA calls for the following
• The ‘single figure’ regulations should be corrected.
• The chain of approval for directors’ pay should include real investors who are beneficial owners instead of being confined to fund managers who are conflicted intermediaries.
• The regulatory consultation process should be revised to give due weight to beneficial owners instead of intermediaries.
UKSA's earlier analysis of the numbers is here.