Property chiefs in the UK’s largest listed real estate companies saw their collective pay slashed by £23.3m last year.
According to EG’s analysis of the 29 FTSE 100 and 250 real estate firms, property chief executives took home £58.8m in 2019, down from £82.1m in 2018.
And for three propco chief executives, 2019’s remuneration was significantly down on the year before. Persimmon’s Dave Jenkinson, Sirius Real Estate’s Andrew Coombs and the former chief executive of St Modwen, Mark Allan (all pictured above), received just £2.6m between them last year, compared with £33.1m in 2018.
The 2018 figures were boosted by large bonus payments that were not repeated last year.
Persimmon’s Jenkinson took home £25m in 2018 – when he was group managing director – under a controversial sales-linked bonus scheme. He was promoted to chief executive in February last year but saw his pay slide to £673,000, with no bonus or long-term incentive plan, making him the second-lowest paid of the property chief executives. Jenkinson will leave the company this year, succeeded by National Express chief executive Dean Finch. Finch joins with a salary of £725,000.
Sirius’ Coombs received just £865,000 last year compared with £5.7m in 2018. Coombs’ 2018 remuneration package was boosted by a £4.8m pay through the long-term investment plan.
Former St Modwen chief executive Mark Allan forfeited his annual bonus (£661,000) last year after resigning to take the helm at Landsec. Allan’s shares payouts dropped by £744,000, leaving him with a total pay of just over £1m compared with £2.4m the year before. He joins Landsec on a base salary of £800,000, with a relocation payment of £200,000 and an annual bonus of up to 150% of his salary.
Notably missing from the line-up this year were Hansteen’s Ian Watson and Morgan Jones. Following the sale of the warehouse REIT last year to Blackstone, the joint chief executives pocketed an enormous £22.2m each last year (up from £1.5m the previous year), with the business delisted as it became part of the private equity giant.
Housebuilder chief executives are known for their multi-million pound pay packets and last year continued to top the ranking. Three of the five highest-paid executives were housebuilders, with Berkeley’s Rob Perrins scooping the highest at £7.8m. Perrins’ pay was boosted by a £5.5m lift from shares under a long-term incentive plan. Founder and chairman, the late Tony Pidgeley, earned higher than any other boss in the FTSE 350, taking home £8.3m.
SEGRO’s David Sleath cashed in from two LTIPs that saw his pay soar to £6.6m last year, up from £3.9m in 2018. The double payout came as shareholders approved a change in the vesting period, earning £4.9m in LTIP (74% of his total pay).
Barratt chief David Thomas took home £3.6m, Taylor Wimpey’s Pete Redfern earned £3m, while LondonMetric’s Andrew Jones secured £2.8m. At the other end of the scale, McCarthy & Stone’s John Tonkiss took home a modest £659,000.
On average, housebuilder bosses earned £2.6m, against the property (REITs and wider real estate) chiefs’ £1.7m.
Some 15 of the 29 chiefs were paid more last year, despite investment slow-downs as Brexit and political turmoil weighed on the economy. Together these bosses benefited from an £9m boost to their pays, with the biggest lift going to SEGRO’s Sleath. SEGRO has been the darling of the listed sector over the past few years and has seen its share price increase from 597.6p at the beginning of 2019 to 987.6p this week.
A number of large payouts from long-term incentive plans, typically collected every three years, made up 39.5% of 2019’s earnings. Base salaries contributed 27.5%, with bonuses at 24.1% and benefits and pensions at 8.86%.
British Land’s Chris Grigg earned the highest base salary at £874,000 (60% of his pay), which was more than double the lowest earner, with Assura’s Jonathan Murphy at £395,000 (35%). Grigg’s overall payout of £1.5m, was the lowest level over the last ten years, with his pay on a downward decline since 2015.
Undeterred by public criticism, housebuilders continued to scoop the highest annual bonuses. Berkeley’s Perrins was awarded the largest at £1.6m (21%), followed by Barratt’s Thomas at just over £1m (30%) and LondonMetric’s Jones at £878,000 (31%).
Remuneration figures for 2020 are likely to see further changes, with many chief executives across the built environment sacrificing part of their salaries for charitable means in response to the coronavirus pandemic.
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