Housebuilder cuts pay to top directors as revised bonus targets are missed in 2008

Boardroom pay at Persimmon more than halved last year as a result of the housing slump.

The housebuilder, which announced in February that no director would receive a bonus for 2008, paid out £2.6m to nine directors. Total pay in 2008, including bonuses, was £5.5m.

Mike Farley
Mike Farley

The announcement by Persimmon that it would not pay bonuses followed a report by Building that the company had widened the target it needed to hit to trigger bonus payments in 2008. The company said it had done so due to the “uncertain outlook for performance”.

It has done the same for 2009 due to what it called “the difficult market conditions faced by the housebuilding industry”. It said bonus targets, which are linked to pre-tax profit and cash generation, needed to reflect current trading conditions and incentivise directors.

In 2008, chief executive Mike Farley saw his pay drop by just under £1m – falling from £1.8m in 2007 to £862,320 last year. It comprised a basic salary of £633,450, which was unchanged from 2007, and other benefits and pension payments.

The second highest paid director was chairman John White, whose take-home pay fell from £1.8m to £725,885. Finance director Mike Killoran took home £405,280 compared to £1m in 2007.

Meanwhile, boardroom pay at Bovis Homes has fallen 11% from £1.4m to £1.25m for its nine directors. Chief executive David Ritchie took home a basic salary of £358,000, which was up 16% on 2007. No director took a bonus in either 2007 or 2008.