Aberdeen tells lawyers to investigate legality of Persimmon boss payment

Investment giant Aberdeen Standard Investments has told its lawyers to look at whether housebuilder Persimmons boss Jeff Fairburn can be prosecuted over his £75m bonus.

Fairburns massive £110m bonus has caused an outcry with almost half of shareholders at its recent annual general meeting (AGM) voting against its pay report, despite Fairburn agreeing to take a reduced payment of £75m.

Read more: Persimmon mauled by MPs over 'egregious' exec pay plan

Euan Stirling, head of stewardship at Aberdeen, condemned the payment at the AGM, which he said was “not even "close to acceptable”.

Now Aberdeen has instructed its in-house lawyers to look at whether Fairburn breached the Companies Act in taking such a huge payment.

Section 172 of the Companies Act focuses on the duties of directors of companies to promote the success of the company for the benefit of its members as a whole.

Read more: Persimmon in close shave as almost half of shareholders reject pay report

It means directors need to take into account the long-term interests of the company, the interests of its employees, and maintain high standards of business conduct.

Last week Stirling appeared before the influential business, energy and industrial strategy committee (BEIS) to discuss excessive corporate pay.

At the same hearing the chair of Persimmons remuneration committee Marion Sears received a mauling from MPs after admitting she did not know how much an average employee was paid.

Chair of the committee, Rachel Reeves, said Sears performance was a “disgrace”.

The pay deal, which was backed by shareholders in 2012, was linked to the companys share price.

Crucially it was not capped so after Persimmons share price more than doubled since 2012 its top executives were due a huge windfall.

Persimmon declined to comment.

[contf] [contfnew]

CityAM

[contfnewc] [contfnewc]