Is it possible to defend the Persimmon boss’s nine-digit bonus? Well, let me try

New Year’s Eve was certainly a day for celebration in the household of 53-year-old Jeff Fairburn, chief executive of the housebuilder Persimmon. He was due to receive the first £50 million tranche of shares under a bonus scheme that has won him total entitlements of £110 million. He must have done a terrific job, you’ll be thinking, if shareholders value him so highly. But in fact his winnings (plus £400 million shared by 150 other Persimmon executives) are the freak outcome of a 2012 scheme that was tied to the company’s share price and dividend record but failed to include a cap on how high rewards might go.

Then in April 2013 came George Osborne’s ‘help-to-buy’ initiative, designed to kickstart the housing market by offering homebuyers a government loan of 20 per cent of the purchase price, interest-free for five years. Half of Persimmon’s recent house sales have been underpinned by help-to-buy, and its share price has almost tripled in response.