UK house builder Persimmon has narrowly survived a revolt by investors furious about a pay deal for its chief executive worth roughly £75 million ($104 million).
Just over 51% of shareholders voted on Wednesday to approve a controversial 2017 pay package for Persimmon executives including CEO Jeff Fairburn. The company has come under heavy criticism over the size of the planned payouts, despite agreeing to reduce them ahead of the vote.
Fairburn agreed earlier this year to cut his proposed compensation from a planned £110 million ($153 million) to £75 million. He also pledged to donate a “substantial” sum to charity, but the recipients and the size of the payments have not been disclosed.
The company admitted on Wednesday that the original planned payouts, which were tied to performance but not capped, were excessive.
Nigel Mills, the interim chairman of Persimmon (, “apologized unreservedly” to shareholders at the company’s annual meeting on Wednesday in the United Kingdom. )
“This could have all have been handled better,” he said. “Indeed it should have been.”
Mills said that no one could have predicted that company performance “would be so good over such a long period of time,” but he also acknowledged that the bonus scheme should have been capped.
Shareholders voted 51.5% to 48.5% in favor of the revised pay package, which made Fairburn the top paid CEO in Britain by a wide margin.
Critics have argued that the bonuses were undeserved because Persimmon’s strong performance was fueled in part by a taxpayer-backed scheme that increased demand for new homes.
Aberdeen Standard Investments, which represents shareholders that own 2.3% of the company’s shares, voted against the pay package, and said that reducing the payment from £110 million to £75 million “does not even get close to acceptable.”
Euan Stirling, the head of stewardship at Aberdeen Standard Investments, said that being a chief executive “requires a personal motivation that goes beyond simply amassing a fortune.”
“The long-term success of the company is being endangered by the reputational damage associated with grossly excessive pay,” he added in a statement before the vote was taken.
Nicholas Wrigley, the former chairman of Persimmon, resigned in the wake of the pay scandal. Jonathan Davie, who oversaw remuneration, also left his post on the board.
“We must now look to put this issue behind us and to enable the business to be recognized once again for its exceptional performance,” Mills said in a statement after the vote.
CNNMoney (London) First published April 25, 2018: 12:52 PM ET