7th Nov 2018 07:43
LONDON (Alliance News) - FTSE 100-listed housebuilder Persimmon PLC said on Wednesday that by the request of the group itself, Chief Executive Officer Jeff Fairburn will resign from his role, with effect at the end of 2018.
In a separate announcement, Persimmon reported growth in forward sales reserved beyond 2018 against the year before, citing positive market conditions.
Fairburn will be replaced by Managing Director David Jenkinson on an interim basis until a permanent successor is appointed. Fairburn has been chief executive at Persimmon for five years since 2013.
The group said that despite being a successful leader, the "distraction" over the 2012 long term incentive plan scheme has had a continued negative impact on Persimmon's reputation.
Under the terms of the 2012 LTIP, rewards for participants vest in two tranches. The first of these, vested on December 31, will be exercisable from next week onwards. The second and final tranche will vest once the group has returned 620p per share in cash to shareholders, in line with the scheme rules.
In February, Fairburn, Jenkinson, and Chief Financial Officer Mike Killoran decided to reduce their overall share entitlement to half of which they would become eligible for on the second vesting following criticism from UK media and politicians.
Additionally, they also chose to extend until 2021 the holding period applying to 50% of any shares under any second vest, other than shares sold to cover tax liabilities.
"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 GBP3.4 billion to GBP7.5 billion, returning over GBP2.2 billion 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," said Chairman Roger Devlin.
For the third quarter if its financial year, Persimmon said it saw stronger customer activity due to the traditional seasonality of the market.
Private sales since the housebuilder reported its interim results on August 21 up to November 6 have risen by 3% compared to the year before, as has the group's outlet network, which is set to support further sales through into 2019.
GBP987 million of forward sales have been reserved beyond 2018, up 9% from GBP909 million the year before. In regional markets, sales price have remained firm.
Persimmon also said it was making several advances, including the opening of a new regional operating business in South Yorkshire for January 2019, and the development of its own internet broadband service Fibrenest for home customers.
Persimmon will release a further trading update on January 15.
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