Berkeley founder Tony Pidgley gets £23m payday – with more to come

Builder’s bonus scheme set up in 2009 pays out for big increase in share price

Click to follow
The Independent Online

Tony Pidgley, the founder of the housebuilder Berkeley, added fuel to concerns over soaring corporate pay yesterday after landing a huge £23.3m payday for last year – with the potential for another £26m bonanza for this year.

The housebuilder’s annual report revealed the bumper payout to Mr Pidgley following the vesting of bonus schemes, one of which was struck in the depths of the financial crisis. The huge award catapults the Berkeley boss into second in the ranks of the UK’s top corporate earners – currently led by Sir Martin Sorrell, the founder of the advertising giant WPP.

Mr Pidgley’s £23.3m package – consisting of £19.8m in share options, a £2.48m bonus, £825,000 in basic salary and £188,000 in pension and benefits – is more than six times what he earned a year earlier, when he was paid £3.76m. Managing director Rob Perrins also landed a £12.4m payday.

The bulk of the founder’s windfall comes from a long-term bonus scheme which began in 2009, in the aftermath of the financial crisis. The incentive scheme saw Mr Pidgley granted 750,000 shares worth £27.02 each in April – shares he was able to buy at just £4.96 a share. The chief executive is in line for a potentially even bigger award next year with another maximum 750,000 shares on offer. At today’s share price of £35.46, that would leave Mr Pidgley in line for stock worth more than £26m.

The housebuilding supremo – renowned as a sage who called the top of the housing market in the early 1990s and the mid-2000s – owns nearly 5 per cent of the company, which is approaching FTSE 100 territory.

He is in line for another huge payout if Berkeley completes its plan to return £1.7bn to shareholders by 2021. The company, which sold 3,355 homes last year, boosted profits by 20 per cent to £454.6m and has been a beneficiary of the Government’s Help to Buy scheme.

Mr Pidgley is now worth more than £200m, according to the Sunday Times Rich List. Born in 1947 to a single mother and then adopted from Barnardos, he spent his early life living in a disused railway carriage, working with his parents cutting down trees and selling the logs. He founded Berkeley in 1976 and a decade ago fought off a takeover bid from his own son.

The share price has quadrupled under Mr Pidgley’s watch since the financial crisis. A spokesman said: “Our policy is to reward success over the long term and these awards reflect the value delivered to shareholders through a total shareholder return of 300 per cent over the last six years.”

This is not Berkeley’s first brush with controversy over pay. In 2003, the company bowed to pressure from the corporate governance lobby, saying a decision to pay its managing director more than £1.2m from a bonus scheme he had not originally been included in had been “undesirable”. But the housebuilder added that Mr Pidgley could keep the payment, making his total remuneration package for the year worth more than £3.8m.

Comments