EXCL Vince Cable tells 'fat cat' housing bosses to curb eye-watering exec bonuses
Vince Cable will today tell housing bosses to rein in multi-million pound bonuses paid to chief executives - or risk facing a forced cap.
The Liberal Democrat leader and former business secretary will point to the £110m bonus Jeff Fairburn, the chief executive of housing firm Persimmon, was initially awarded last year.
In a speech in central London, he will say the British public “will no longer put up with this kind of fat cattery” while they grapple with a housing sector in crisis.
The bonus for Mr Fairburn sparked outrage when it was announced in December last year. In the wake of the uproar it was slashed to £75m, but shareholders warned they could still take legal action against the firm.
Sir Vince will urge bosses at the Home Builders Federation Annual Housing Market Intelligence Conference this morning to sign up to a code or face action from MPs.
“Persimmon’s bonuses were a disgrace and rightly triggered criticism from within the industry,” he told PoliticsHome.
“But house builders must show they are serious and crack down on the excessive bonuses that contributed to the financial crisis.”
The former coalition minister will also say property sales under the government-subsidised Help-to-Buy scheme should be excluded from remuneration targets for bosses.
“A voluntary code capping bonuses - at what would still be beyond most people’s dreams - and excluding government-subsidised schemes that are no measure of an executive’s performance, would show that housebuilders are serious,” he said.
“The public will no longer put up with this kind of fat cattery and, if boards do not follow this type of course, we will pursue changes in legislation.”
After his initial £110m bonus award was announced last year, Mr Fairburn agreed to hand back some £25m and said he had planned to give a portion of the sum to charity..
But the Times reported in June that Aberdeen Standard Investments, a shareholder in Persimmon, was mulling legal action on the grounds that the eye-watering bonus scheme had damaged the firm’s reputation.
Aberdeen Standard Investments could not be contacted to confirm whether the legal action was still a possibility.
'RECORD INCREASES IN HOUSING'
A Spokesman for the House Building Federation, which represents private housebuilding firms, told PoliticsHome: “The industry has delivered record increases in housing over the past four years since Help-to-Buy was introduced.
"This is helping address our housing crisis and has created tens of thousands of new jobs and delivered significant investment in existing communities.
"The industry is committed to delivering more high quality, desperately needed homes in the coming years and continuing to provide a massive boost to UKPLC."