Berkeley hit by investor revolt over fat cat payout as 40% of shareholders oppose plan to see chief executive earn £8m a year
Berkeley Group suffered a bloody nose when investors rebelled against fat boardroom pay.
40 per cent of shareholders who voted at the annual meeting opposed the pay plan, which would see chief executive Rob Perrins take home £8m a year.
That’s equal to the amount he’s been paid for each of the past five years.
Housebuilder Berkeley Group expects to make pre-tax profits of £600m for the year ending 30 April 2023 – up from £553m in the same period a year earlier
Perrins, 57, earned a staggering £28m in 2016-17 and has pocketed almost £100m over the past decade.
The pay revolt comes as the company, which builds houses in London, Birmingham and the south of England, said it expected to post pre-tax profits of £600m for the year ending 30 April 2023.
This will be up from £553m in the same period a year earlier, and profits are expected to rise to £625m for the year ending April 2024.
Berkeley benefited from strong demand for new homes and rising prices that helped offset higher construction costs.
But the firm said it would be more cautious about buying land because of higher costs, which are growing by 5 to 10 percent in its portfolio.
It said that “new land will be added to land holdings in a very selective manner.” Russ Mould, Chief Investment Officer at AJ Bell, said: “Berkeley had a reputation built up under its late founder and chairman Tony Pidgeley as a very astute player in the property market and a best-in-class housebuilder.
“These Rolls-Royce credentials were shown in the latest bidding update, which showed the company’s continued ability to mitigate rising costs by raising prices.
“This may suggest that the quality of Berkeley’s housing stock gives it at least an element of pricing power in an uncertain market.”
Berkeley shares rose 3.7 percent, but shares of several major real estate firms have fallen in recent weeks amid concerns that the sector is facing its “toughest” time in a decade.
Analysts at Berenberg said last week that inflation and a looming recession will drive up the cost of debt, forcing real estate firms to cut investment and delay new developments as they grapple with rising costs and falling demand.