Call to end Help to Buy subsidies as three Persimmon executives share £100m bonus
A think-tank has urged the Scottish Government to end Help to Buy subsidies after it was revealed that three executives at housebuilder Persimmon were paid in excess of £100 million last year in a bonuses scheme linked to the policy.
An annual report published by Persimmon revealed that chief executive Jeff Fairburn was paid a total of £47m in 2017, finance director Mike Killoran received £37m and managing director David Jenkinson received £20m.
Although directors agreed to forgo around £50m in bonuses following a political and shareholder backlash over the incentive scheme, these latest figures were unaffected by last month’s £50m reduction.
The pay controversy led to the resignation of chairman Nicholas Wrigley and remuneration committee chairman Jonathan Davie late last year.
The Common Weal think-tank has argued that the subsidies that housebuilders receive from the Scottish Government feed “astonishing corporate greed” and should come to an end.
In December 2017, The Ferret revealed that Persimmon is the biggest benefactor of the Scottish Government’s Help to Buy scheme, receiving over £77 million from 2013-2017 from the subsidy.
The think-tank also highlighted research, including from the Office for Budget Responsibility, which has shown that the effect of this subsidy is to push up house prices in general, making mortgages more unaffordable.
Ben Wray, Common Weal head of policy, said: “Persimmon’s executive team have taken corporate greed to whole new heights. There is a sickness at the heart of our economic system when, while millions have seen their pay stagnate for a decade, a company can dish out over £100m in bonuses between three people.
“But perhaps the worst thing about this is that the Scottish Government is lining Persimmon’s pockets with its help-to-buy scheme. If the £77m the Scottish Government have subsidised Persimmon with was returned, the three execs would still have nearly £30m in bonuses between them, and that’s just 40% of what they are likely to receive when bonus conditions are met!
“It can’t be value for money, in the middle of a housing crisis with a serious homelessness problem, that this is what the Scottish Government is spending its austerity-hit budget on. Help-to-buy is a flawed scheme that only pushes up house prices for most – it should be scrapped and the money re-invested into public housing.”