Persimmon Boss Gets £132m Bonus After Benefitting From Help To Buy Scheme

The boss of York-based housebuilder Persimmon has been given a whopping £132 million bonus after the company made huge profits from the Help to Buy scheme.

Jeff Fairburn, who grew up in York, received the first £53 million chunk of his bonus in time for the start of the New Year.

The bonus is said to have been inflated by Help to Buy – a government scheme which helps first-time buyers get on the housing ladder by providing a loan worth 20% of the value of a property.

More than 50% of Persimmon’s sales are through Help to Buy.

Liberal Democrat leader Sir Vince Cable branded Fairburn’s bonus as “obscene”, while former Tory Minister Steve Norris said it was “hard-pressed taxpayers” who had made Fairburn and other housebuilding bosses so rich.

Vince Cable, who is also from York, said it was an outrage that Fairburn could profit so much from a “government subsidy” in the Help to Buy scheme.
Source: Wikimedia

 

The Mail on Sunday revealed in November that Fairburn was to collect the first part of his huge bonus in December.

The coverage prompted the resignations of two Persimmon directors, including chairman Nicholas Wrigley, who is understood to have asked Fairburn to give some of his bonus to a housing charity.

Fairburn has repeatedly declined to comment about whether he intends to donate any of his bonus to charity.

A spokesman for Persimmon said: “That is a private family matter for the individuals.”

The Guardian has calculated, using government figures, that Fairburn’s £110 million bonus could be used to build 1,375 council houses.

A donation of £4.6 million – just 1/25th of Fairburn’s bonus – could provide a home for all of the 58 homeless families in York.

It would cost £60.8m to build a home for all 760 homeless families in Yorkshire and Humber, leaving behind £49m for Fairburn.

Fairburn grew up in York and went to the city’s Fulford comprehensive school.
Source: Wikimedia

 

Rachael Maskell, Labour MP for York Central, said: “It is disgraceful that while Britain faces a housing crisis, housebuilding executives can be paid extortionate bonuses after making huge profits off the back of a government subsidy.

“This money simply should be put to better use – like ending homelessness in the firm’s own city of York – rather than further lining the pockets of greedy property developers.”

As well as the £110m that Persimmon is paying out to Fairburn, the company is sharing out a further £400m to 150 other executives and middle managers.

The payouts, made in company shares that can then be cashed in, are linked to the FTSE 100 company’s dividend payments and its stock market performance.

Persimmon’s share price has more than doubled since the Help to Buy scheme launched in April 2013.

About half of Persimmon homes sold last year were to Help to Buy recipients.

Persimmon has a market cap of over £5 billion.
Source: The Blue Diamond Gallery

 

Persimmon, which is named after a racehorse that won the 1896 Derby and St Leger for the Prince of Wales, donated £1.1m to charity last year, far below the average FTSE 100 firm donation of £3.8m.

Clare Usher, of York youth homelessness charity SASH, said a donation of as little as £1m – less than 1% of Fairburn’s bonus – could guarantee the charity has the funds to help homeless teenagers for four years.

Stefan Stern, director of the High Pay Centre think tank, said Fairburn’s pay was “a prime example of the unacceptable face of capitalism”.

DealMakerz thinks Fairburn had better hand over a large chunk to charity or face the wrath of the British public for many years to come.

The fact that taxpayers have effectively boosted his bonus is particularly galling.

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