黑洞社区

Politicians have reacted angrily to the decision of two housebuilders that received millions of pounds in Kickstart subsidies to pay bonuses to their chief executives.

Last week 黑洞社区 reported that Peter Redfern of Taylor Wimpey received a 拢788,000 bonus for 2009, despite his loss-making firm being earmarked for 拢6.9m of Kickstart grant. Meanwhile, Persimmon boss Mike Farley was paid a 拢406,000 bonus for the same year, despite his firm receiving 拢32.2m of Kickstart funding.

Clive Betts, a Labour member of the House of Commons鈥� housing select committee, said: 鈥淲hen firms have been in difficulty and when public money has been used, they ought to be very careful about allocating money this way. They need to think very carefully about how it looks to the public to be handing well paid executives further bonuses.鈥�

Sarah Teather, the Liberal Democrats鈥� housing spokesperson, echoed his comments, saying: 鈥淥rganisations in receipt of public money have a duty to use that wisely. It is unthinkable that, in the middle of a housing crisis, huge bonuses should take priority over new homes.鈥�

So far, 拢508m has been spent on restarting stalled developments under the Kickstart programme. Some of the money will be recouped when the houses are sold, but much of it will be lost.

It is unthinkable that bonuses should take priority over
new homes

Sarah Teather, Lib Dems

Roger Humber, strategic policy adviser to the House Builders Association, speaking in a personal capacity, said: 鈥淎lthough it is on a smaller scale, this is the same principle as bankers getting paid huge bonuses after they鈥檝e been bailed out.鈥�

Taylor Wimpey鈥檚 annual report said Redfern鈥檚 bonus was based on his successful renegotiation of financial covenants, reducing debt facilities, improving cash flow and reaching targets on net assets. Farley鈥檚 bonus was based on profit and cash generation. City analysts said cash generation was an increasingly common target, but described Redfern鈥檚 targets as 鈥渦nusual鈥�.

This year Redfern鈥檚 bonus will depend on profit before tax, operating cash flow, build costs, the order book and customer service. Persimmon will revert to a profit target. Both remuneration packages will go before shareholders at the companies鈥� annual meetings later this month.

Taylor Wimpey was unavailable for comment at the time of going to press.

A Persimmon spokesperson declined to comment on the Kickstart cash but said: "The remuneration committee each year takes into consideration a number of performance measures and metrics when deciding on executive compensation. Targets for 2009 were measured on cash generation and profit."