1. Money matters
January 9, 2018

Persimmon’s chief receives £110m bonus – how did this compare to other FTSE 100 companies?

Housebuilder Persimmon is going to give its chief executive a £110m bonus following higher than expected profits in 2017.

The company’s controversial bonus scheme made headways last year when it was revealed more than £500m would be given to 150 senior staff. The chief executive, Jeff Fairburn received £50m worth of shares on New Year’s Eve, with the rest to be delivered following the company’s good results.

Not everybody is happy about it. In December, Persimmon’s chair resigned, calling the scheme “obscene”. Nicholas Wrigley, a former banker, said he regretted not capping the bonus scheme and was leaving “in recognition of its omission.”

Whilst Persimmon’s bonus scheme is thought to be the most generous in Britain, how does it stand up to other FTSE 100 schemes?

1. Sir Martin Sorrell, WPP

Advertising group WPP’s chief executive Martin Sorrell is considered to be the highest paid chief executive in the UK. In 2016, he received £48m in remuneration, which included total pay, bonuses and incentive scheme payouts.

It sounds a lot but this was actually down from £70.4m the year before. This is because of a shareholder revolt in 2015, where one-third of WPP shareholders opposed the high package.

As a result, WPP announced it was going to tighten its remuneration policy for Sorrell, with a potential payout band of £14.9m to £19.2m.

2. Rakesh Kapoor, Reckitt Benckiser Group

In 2016, consumer goods company Reckitt Benckiser cut the pay package of its chief executive, Rakesh Kapoor, by more than a third after shareholder pressure.

Kapoor’s pay package was a total of £14.6m, down from £25.5m in 2015. The Financial Times reported that he was set to receive an additional £14m but the Reckitt’s remuneration committee decided “to exercise discretion”.

Kapoor’s base salary is around £917,000.

3. Pascal Soirot, AstraZeneca

Pascal Soirot, the chief executive of pharmaceutical firm AstraZeneca, received a healthy £13.4m remuneration package last year. This was a 68 percent increase on the £7.96m he received the year before.

According to The Telegraph, Soirot’s package included a base salary of £1.19m, an annual bonus of £1.168m – a third of which was paid in shares, £6.81m as part of a long-term incentive plan, and a one-off payment of £3.62m in compensation for bonuses he forfeited when he left his previous employer.

4. Bob Dudley, BP

After receiving a £14m pay package in 2015, Bob Dudley’s remuneration packet was slashed by 40 percent to £8.5m to prevent a shareholder revolt in 2016.

At the time, the company’s remuneration committee chair, Dame Ann Dowling, said:

“Last year’s AGM remuneration vote was a clear message about how we manage executive pay.”

New rules were introduced too in order to prevent extortionately high payouts to senior staff. Dudley’s maximum long-term remuneration package is now limited to five times his salary, down from seven. As well, his bonus payments will now be cut by a quarter and the company aims to implement strict criteria for maximum bonus.

5. Albert Manifold, CRH

The chief executive of Ireland’s largest publicly-quoted company received a hefty remuneration package of £8.8m in 2016. This was deemed a record-breaking salary for the boss of an Irish company.

Manifold, the head of the building firm, received a basic salary of £1.2m, as well as £613,000 in pension payments, a £2.7m annual bonus, and a £4.2m award under a long-term incentive plan.

This payment was up from £4.7m in 2015.

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