Jeff Fairburn has for months been the figure of executive greed and excess after taking a £75m bonus thanks to the success of the taxpayer-funded Help to Buy scheme propping up demand for new homes.
His inability to defend his position was highlighted last month when he walked away from BBC cameras when an interviewer raised the topic. (See BBC footage below.)
In his defence, Jeff Fairburn had been entitled to an even bigger bonus of around £110m under the company's 2012 long term incentive plan (LTIP), but after an initial outcry when this hit the press he agreed to set some aside into a charitable foundation. He took only £75m last February.
A statement put out by the board today says that he is stepping down as chief executive after Christmas “at the request of the company”.
It said: “Jeff has been a successful leader of the business since his appointment in 2013, but the board believes that the distraction around his remuneration from the 2012 LTIP scheme continues to have a negative impact on the reputation of the business and consequently on Jeff's ability to continue in his role.”
David Jenkinson, currently group managing director, will become interim group chief executive and will assume his new role on 31 December 2018. The board has started a formal process to select a permanent successor.
Persimmon chairman Roger Devlin said that Jeff Fairburn had done a great job and seemed to blame the media for whipping up such a fuss. He said: "Under Jeff's leadership Persimmon has sold more than 74,000 homes across the UK while more than doubling in size, increasing its market capitalisation from £3.4bn to £7.5bn, returning over £2.2bn to shareholders and producing industry leading margins and returns on capital. However, given the continuing distraction around the scale of his remuneration resulting from the 2012 LTIP, the board believes that it is now necessary for there to be to be a change of leadership. On behalf of the board I would like to thank Jeff for his significant contribution to the business over a 29 year period.”
Jeff Fairburn said: "It has been an honour to lead Persimmon through an exciting period of development. I had hoped that revealing my plans to create a charitable trust and to waive a proportion of the award would enable the company to put the issue of the 2012 LTIP behind it. However, this has not been the case and so it is clearly now in the best interests of Persimmon that I should step down."
Persimmon's financial public relations advisers are Citigate Dewe Rogerson.