April 27, 2017 / 9:14 AM / 3 months ago

Royal London to vote against Persimmon on pay, board members

2 Min Read

Builders construct modular Space4 homes on a Persimmon development in Coventry, February 22, 2017.Darren Staples

(Reuters) - British investor Royal London Asset Management said on Thursday it would vote against housebuilder Persimmon (PSN.L) on several pay-related issues at its annual general meeting.

RLAM, which has a 0.46 percent stake in Persimmon worth 32 million pounds, said it would oppose planned resolutions to approve the remuneration report, the re-election of the chair of the remuneration committee and committee member Nigel Mills.

The AGM is due to be held later on Thursday.

Ashley Hamilton Claxton, corporate governance manager at Royal London Asset Management, said she had long-standing concerns about pay at the company despite its "impressive" performance.

Calling the firm's long-term incentive plan excessive, she said it could mean a payout equivalent to 10 percent of the value of the company, which could see the chief executive pocket more than 100 million pounds.

"The house building sector is one where companies can experience a significant uplift from factors outside of their control, such as interest rates and government policy. As such we question the value of pay plans that provide high windfall payouts to executives," she said.

However, she did back the firm's new remuneration policy, which governs payouts over the next three years, as it would limit performance share awards to just twice the directors' annual salaries.

Last June, RLAM called on Persimmon to scale back an executive pay plan that could see its management share in windfalls of almost 600 million pounds in six years.

Rival Crest Nicholson (CRST.L) also saw its directors' pay report voted down earlier this year, as investors grow increasingly discontent with housebuilder's large LTIP plans.

Reporting by Rachel Armstrong, Simon Jessop and Esha Vaish; editing by Carolyn Cohn

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