Yahoo Finance Crest Nicholson pushes ahead with bosses' bonuses despite shareholder rebellion
Housebuilder Crest Nicholson is to push ahead with generous share awards for its top executives despite more than half of its shareholders voting against the proposals on Thursday.
Around 107.3 million votes cast at Crest Nicholson’s annual general meeting on Thursday were against the resolution, compared to the 77.3 million who approved the proposal - a 58pc rejection.
But because the vote is non-binding, the company said it would implement its remuneration report regardless. Crest Nicholson’s chief executive, Stephen Stone, is set to receive a share bonus worth almost £812,000, on top of a salary of £541,158, while chief operating officer Patrick Bergin is set to net £562,500, in addition to pay of £375,000.
The vote comes days after Institutional Shareholder Services, the influential investor advisory group, recommended that its members vote down the proposal after raising concerns that the profit targets written into the directors' terms for annual long term incentive payments had been lowered.
ISS said that “the profit target has been reduced for the second consecutive year without any compelling rationale, and the revised targets do not appear to be sufficiently stretching”.
Crest Nicholson said it was “disappointed” with the vote, but defended its decision to set more conservative profit targets on the back of “the uncertain economic backdrop and the competitive environment in which the company operates”.
Crest Nicholson | Bosses' bonuses
The company expects the rate of profit growth to remain “robust but not at levels seen in recent years”, blaming additional investment in land, and the cost of setting up a new division that will support its target of building 4,000 new homes and make £1.4bn of sales by 2019. It called the ambitions “stretching”.
The profit target was cut from between 18pc and 22pc to between 16pc and 20pc last year, and has now been cut again to a range of 5pc to 8pc. Reaching the target accounts for around half of the directors' share awards.
In a statement ahead of the FTSE 250 housebuilder's annual general meeting, chairman William Rucker had said Crest Nicholson's trading environment remained "generally robust", pointing to good sales across the regions in which it operates.
