Our views

Persimmon departure shows consequences of poor governance


Ashley Hamilton Claxton, Head of Responsible Investment

7 November 2018

The departure of Jeff Fairburn, Persimmon’s CEO, shows why governance matters to companies and investors alike. 
As the departing CEO himself acknowledged, executive pay has cast a long shadow over Persimmon’s strong performance for shareholders. This saga is a clear example of how a poorly thought out remuneration decision, in this case made six years ago, can have serious consequences for a company and its shareholders.
 While today’s news is totally understandable, we are sorry to see changes to what we believe have been one of the best management teams in the industry, but we remain confident about the health of this business.

The departure of Jeff Fairburn, Persimmon’s CEO, shows why governance matters to companies and investors alike. 

As the departing CEO himself acknowledged, executive pay has cast a long shadow over Persimmon’s strong performance for shareholders. This saga is a clear example of how a poorly thought out remuneration decision, in this case made six years ago, can have serious consequences for a company and its shareholders. 

While today’s news is totally understandable, we are sorry to see changes to what we believe have been one of the best management teams in the industry, but we remain confident about the health of this business.

Past performance is no guide to the future. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.