Berkeley Group faces unrest as number of investors vote against bosses' pay plan
Housebuilder Berkeley Group has been dealt a blow after 16% of investors voted against pay plans for top bosses amid backlash over a £92 million windfall for six executives.
Berkeley saw its pay plans passed at the firm's annual general meeting in Surrey , with the backing of 84% of votes cast, but the scale of the opposition confirmed mounting unease over recent mammoth handouts.
More than a third of shareholder votes - 33.5% - were also made against the reappointment of non-executive director Adrian Li due to concerns over the number of board roles he holds.
Shareholder advisory groups had raised concerns over the pay deals and Mr Li's roles ahead of the AGM, with Glass Lewis and Pensions and Investment Research Consultants (Pirc) leading calls for votes to be made against the remuneration report.
Bosses including chairman and founder Tony Pidgley and chief executive Rob Perrins picked up £92 million between them thanks to a long-term shares bonus scheme set up in 2011.
Pirc slammed the plans as being "highly excessive" and reiterated "serious concern" despite moves by Berkeley to amend the scheme and cap future rewards.
The hefty pay out came after Berkeley has notched up an impressive share price hike since 2011 and the firm is set to be promoted into the FTSE 100 next month.
But shares fell 3% on Wednesday after it warned London's property market was still being hit by Brexit uncertainty.
The group said it took note of the votes made against Mr Li's reappointment, but insisted it is "satisfied that all directors, including Adrian Li, have sufficient capacity to meet their commitments to the Berkeley Group".
Mr Li holds board roles with seven listed companies - including as executive director and deputy chief executive of The Bank of East Asia - although three of those are part of the same group.
Berkeley said it was consulting with a number of shareholders and advisory groups over the issue.
In its full-year trading update, the group said Brexit worries were compounding already difficult conditions in London after recent stamp duty tax hikes and planning woes.
Berkeley, which is focused on London and the South East, said it remains in "excellent shape" despite the London housing sector troubles, with annual profits set to be "at least as strong" as the previous year.
Trading for the first four months of the financial year has been in line with expectations and sales prices are above business plan levels, according to the group.
Berkeley said: "The London market continues to be adversely impacted by both uncertainty around the terms and implications of Brexit and the changes in recent years to stamp duty land tax and mortgage interest deductibility.
"This has been partly offset by good availability of mortgage finance at low interest rates, favourable currency exchange rates and the quality of Berkeley's well-presented and well-located homes."
It added that new construction in London remained 30% lower than 2015 levels due to a challenging planning environment.
But the group confirmed it was still on track to notch up at least £3 billion in pre-tax profits over the five years to May 2021.