Foxtons chief executive Nic Budden was awarded a bonus of £218,000 last year, despite the estate agent reporting plunging revenues and profits and warning of a tough 2018.
The upmarket estate agent paid 50-year-old Budden £914,000 in 2017, comprising salary, bonus, pension and other factors. That was down from £982,000 in 2016.
News of the bonus has been criticised as it came despite a turbulent 2017 for Foxtons, in which pre-tax profits slumped 65% to £6.5 million and revenues fell to £117.6 million from £132.7 million.
Shareholders’ dividends also took a tumble, falling to 0.7p a share for 2017, down from 2p in 2016.
Like its high street rivals, Foxtons has been hurt by Brexit uncertainty and stamp duty changes hitting demand, as well as pricing for central London homes.
While prices in the capital have remained high, the number of transactions has dropped following a surge in buying activity in previous years
The estate agent also has tough competition from newer online rivals, such as Purplebricks.
In Foxtons’ annual report, Budden said: “We expect trading conditions to remain challenging in 2018, and our current sales pipeline is below where it was this time last year.”
Budden, an economics graduate who has worked at BT, Cable & Wireless and Severn Trent, has been with the company since 2005 and boss since 2014.
He said the lettings arm was more resilient, adding: “In the longer term, whilst recent political events have produced uncertainty for buyers and sellers, we expect London to remain a highly attractive property market.”
Foxtons is hoping its lettings business will capitalise on the spike in the number of people in London living in private rented accommodation. However, new lettings arranged by the firm in 2017 were flat, while revenue within the division fell by 3% to £66 million as a result of lower rental rates in the market.
Chairman Garry Watts added that the firm managed to achieve cost savings of £5.6 million to cope with the ongoing challenging conditions.
But Sheena Mackay, the latest remuneration committee chair, warned of the condition of “the London sales market” and “the wider macro-political uncertainty affecting the London property market” in her letter to shareholders ahead of the section of the annual report devoted to executive pay.
The report also revealed finance chief Mark Berry was handed a £153,000 bonus as part of a £490,000 package. His and Budden’s perks were awarded after they met certain targets. More specifically, Foxtons said Budden’s bonus was awarded for executing “personal and strategic objectives”.
Budden already gets a basic salary of £550,000. It has been flat since 2015 but in that year it was hiked by nearly a fifth because, according to reports, he had been underpaid in the past. He also saw his maximum bonus increased to 125% of that sum.
Salaries are unchanged for 2018. This will be voted on at the next annual general meeting on 17 May.
Foxtons was founded in 1981 and first opened in Notting Hill. Today it has 67 branches.
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