The business editor of right-wing political weekly The Spectator has made an attempt to defend the controversial £109m bonus paid to Jeff Fairburn, the chief executive of housebuilder Persimmon.
Fairburn’s bonus came about as a result of a long-term incentive plan set up by the housebuilder in 2012, tying bonuses to the firm’s share price and dividend record. Some £800m in total is being shared out amongst about 150 senior staff - however, without a cap on the scheme, some payments are extremely large.
The widespread criticism of the bonus payout has led to the resignation of Persimmon’s chief executive, apologising for failing to ensure there was a cap on the bonus scheme.
Now Martin Vander Weyer of The Spectator has described the Fairburn payout as “the freak outcome”of the scheme - and he adds that because much of Persimmon’s recent output has gone in homes sold under Help To Buy, the story has become “a gift for the left.”
This is despite critics of the payout including scourges of the left such as Merryn Somerset Webb who in her Moneyweek column said of the payout: “That’s an insane amount of money for a manager of a listed company to earn.”
However, Vander Weyer claims there are three reasons why the bonus can be defended.
Firstly, he says, the money did not come from the public purse via the Help To Buy scheme that has been beneficial to Persimmon in recent years. the bonuses to top staff at the housebuilder “are actually being paid for by other shareholders whose holdings have been diluted.”
Secondly, to solve the housing shortage the country requires “suitably incentivised executives” - and he says the fact that 150 of them are being rewarded by one company alone “is really quite democratic.”
Thirdly, Vander Weyer says that because capitalism is the best engine of economic progress we’ve got “we should overlook occasional misallocations like this one.”
Perhaps recognising the unpopularity of his position, the editor concludes his piece in this week’s issue of the magazine by writing: “Have I persuaded you? I’m guessing probably not.”
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Good luck to him. Some people win the lottery, some people are fortunate football players, some people are merciless despots - some people work unstintingly all their lives for the good of others but get little more than a living wage. The world is far from fair. I'm sure that every one of Mr Fairburn's naysayers wouldn't refuse this fluky golden platter if offered to them.
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