Berkeley has been hit by an investor revolt over paying Fat Cats as 40% of shareholders oppose a plan that says the chief executive could earn £8million a year
The Berkeley Group suffered a bloody nose as investors rebelled in the boardroom over fat cat wages.
In a painful setback for the home builder, 40 per cent of shareholders voting at the annual meeting rejected a pay plan that could result in chief executive Rob Perrins taking home £8million a year.
That’s the amount he’s paid for each of the last five years.
Housebuilder Berkeley Group expects pre-tax profit of £600m for the year ended 30 April 2023 – up from £553m in the same period last year
Perrins, 57, raised a staggering £28m in 2016-17 and has pocketed nearly £100m over the past decade.
The rebellion over pay came as the company, which builds homes across London, Birmingham and the south of England, announced it was posting £600m pre-tax profit for the year ending 30 April 2023.
That would be an increase from £553m in the same period last year and profits are expected to rise to £625m for the year ending April 2024.
Berkeley has benefited from strong demand for new homes and rising prices, which have helped offset increased construction costs.
However, the company said it is more cautious about buying land due to higher costs, which are rising between 5 percent and 10 percent across the portfolio.
“New land will only be added to land holdings very selectively,” it said. Russ Mold, Investment Director at AJ Bell said, “Berkeley had a reputation under its late founder and chairman Tony Pidgley as a very smart real estate player and a world class home builder.
‘These credentials were demonstrated by Rolls-Royce in its latest trading update, demonstrating the company’s continued ability to mitigate rising costs through price increases.
“This may suggest that the quality of Berkeley’s housing stock gives it at least some 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 fears the sector is facing its “toughest” time in over a decade.
Berenberg analysts said last week inflation and a looming recession would raise the cost of debt, forcing real estate companies to cut investment and delay new developments as they grapple with rising costs and lower demand.
