Persimmon, the housebuilder which is paying its chief executive a £110m bonus, has said its 2017 profits will be higher than expected due to the government’s cut in stamp duty for first-time buyers.
The company, which has also massively benefited from the government’s help-to-buy scheme, handed its chief executive, Jeff Fairburn, £50m worth of shares on New Year’s Eve in the fist wave of what has been described as an “obscene” bonus.
Persimmon said it sold 16,043 homes last year for a total of £3.42bn, a 9% increase on 2016. As a result of the increase in sales, “we anticipate our pre-tax profits for the year will be modestly ahead of market consensus,” the company said.
Analysts already expect the company to post a 20% increase in full-year profits to about £957m, according to a poll by Thomson Reuters. The company will publish its full-year results on 27 February.
Persimmon did not mention the controversial bonus scheme – believed to be Britain’s most generous ever – in its brief trading update released to the stock exchange on Tuesday. The company’s top 150 employees are to share a £500m payout, linked to shareholder dividends.
The scale of Fairburn’s bonus has been widely criticised by politicians, charities and corporate governance experts, who have described it as “obscene”, “corporate looting” and a reward based on “taxpayer subsidies”. Persimmon is one of the biggest beneficiaries of the government’s help-to-buy programme, which has lifted sales and boosted house prices across the UK.
Nicholas Wrigley, a former banker, quit as Persimmon’s chairman last month, stating that he regretted not putting a cap on bonus scheme and was leaving “in recognition of this omission”. Wrigley is understood to have put pressure on Fairburn to donate some of his bonus to charity.
Fairburn, who grew up in York and went to the city’s Fulford comprehensive school, has repeatedly declined to comment about whether he intends to donate any of his bonus to charity. A spokesman for Persimmon said: “That is a private family matter for the individuals.”
The Guardian has calculated that just a fraction of Fairburn’s bonus could build enough homes to end homelessness in York. A donation of £4.6m – just 1/25th of Fairburn’s bonus – could provide a home for all of the 58 homeless families in the city.
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