The UK home builder Persimmon is under stockholder fire for some hefty compensation packages, including paying CEO Jeff Fairburn $105 million for his work in 2017. The packages were tied to performance, which should make shareholders happy right? But the performance metrics weren’t capped, so the compensation ballooned beyond what many shareholders consider reasonable. Even Mr. Fairburn acknowledged, in a way, that the payments were gaudy — he agreed to accept $105 million when according to his contract he was actually due over $150 million. Well maybe he didn’t agree so much as shareholders voted to cut his package.
Interim chairman of the board at Persimmon Nigel Mills has been putting out the angry compensation-related fires as best he can. Mills apologized to shareholders at the UK company’s annual meeting this week. But he also explained why the pay packages had ballooned — and with his explanation came the silver lining. Nobody knew when the packages were negotiated that business “would be so good over such a long period of time,” Mills explained.