Berkeley, the housebuilder at the centre of a boardroom pay controversy earlier this year following a £1.2m bonus payment to its founder Tony Pidgley, began the process of overhauling its corporate governance arrangements yesterday.
The company announced the resignation of its senior independent director, Fred Wellings, who also chairs the audit committee, and said it intended to strengthen its board with the appointment of two new non-executives.
Berkeley also said details of a new remuneration policy, designed to be "clear, transparent and understandable", would be unveiled in the new year. Halliwell Consulting is carrying out a review of the present remuneration arrangements which have been heavily criticised.
There are no targets attached to Berkeley's long-term incentive plan, and awards are entirely at the discretion of the remuneration committee.
Berkeley ran into a storm of protest in August after it emerged that Mr Pidgley, its managing director, had been included retrospectively in the scheme and had received a £1.2m payment.
Although nearly half of Berkeley's shareholders refused to support the move, Mr Pidgley refused to pay back the money.
The company insisted that his original exclusion from the scheme had been an administrative error.
Tony Palmer has taken over from Mr Wellings as senior independent director, while Victoria Mitchell will continue to chair the remuneration committee.
The board is due to meet next week to endorse the appointment of two new non-executives - one with a finance background who will take over as chair of the audit committee, and one with a background in central or local government.
Even after the appointments, however, executive directors including the executive chairman, Roger Lewis, will still outnumber non-executives by five to four.
The shake-up came as Berkeley announced a 3.5 per cent increase in pre-tax profits to £117m for the six months to the end of October, but cautioned that the UK property market remained uncertain. The company said, however, that the conditions were those it had planned for.
Mr Lewis said: "It's a tougher market compared with 18 months ago, but we prefer that to a boom market where anyone can succeed and you can paper over the cracks."
He said he was hopeful that next week's pre-Budget report would include measures to stimulate the supply of new homes.
But he urged the Chancellor, Gordon Brown, not to increase stamp duty, which already brings £4bn a year into the Government's coffers.
There has been speculation that the Chancellor might introduce a higher rate of stamp duty for houses worth more than £1m.Reuse content