Berkeley hit by investor revolt over fat cat pay

Berkeley hit by investor revolt over fat cat pay as 40% of shareholders oppose plan that could see chief exec earn £8m a year

Berkeley Group suffered a bloody nose as investors revolted against fat cat pay in the boardroom.

In a bruising setback for the housebuilder, 40 per cent of shareholders who voted at the annual meeting opposed a pay plan that could see chief executive Rob Perrins take home £8million a year.

That is similar to the amount he has been paid for each of the past five years.

Housebuilder Berkeley Group expects to make a pre-tax profit of £600m for the year ending April 30, 2023 –  up from £553m in the same period a year earlier

Perrins, 57, picked up a staggering £28million 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 – said it expects to make a pre-tax profit of £600million for the year ending April 30, 2023. 

That would be up from £553million in the same period a year earlier and profits are expected to increase to £625million for the year ending April 2024.

Berkeley has benefited from strong demand for new homes and rising prices which have helped to offset increased building costs.

But the firm said it would be more careful in buying land due to higher costs, which are rising between 5 per cent and 10 per cent across its portfolio.

It said ‘new land will only be added to the land holdings very selectively’. Russ Mould, investment director at AJ Bell, said: ‘Berkeley had a reputation, built up under its late founder and chair Tony Pidgley, of being a very astute player in the property market and a best-in-class housebuilder.

‘These Rolls-Royce credentials were on show in its latest trading update which displayed the company’s continued ability to mitigate rising costs by putting up prices. 

‘This could suggest 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 per cent but stocks in several major property firms have fallen in recent weeks amid fears the sector is facing its ‘toughest’ time in over a decade.

Analysts at Berenberg last week said inflation and an impending recession would increase the cost of debt, forcing real estate firms to cut investment and delay new developments as they grappled with rising costs and lower demand.

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