Berkeley fails to calm investors

BERKELEY Group attempted to apologise today for the controversial pay package worth £3.8m awarded to its chief executive Tony Pidgley.

But the upmarket housebuilder is still likely to face a shareholder revolt at its annual meeting next week as it has resolved that Pidgley can keep contentious payments worth more than £1.6m.

Berkeley caused a storm when its annual report revealed it paid Pidgley £1.2m out of its lucrative long-term investment plan for executives, even though he was not originally in the scheme.

It also drew flak for awarding him 205,000 share options, which within weeks had made him a paper profit of more than £400,000.

The payout and options came on top of a £1.5m performance bonus for the year and basic salary of £650,000. Shareholders damned Berkeley's actions as 'unacceptable'.

Today, after 'intensive discussions' with major shareholders represented by the Association of British Insurers, chairman Roger Lewis said the incentive bonus 'was clearly undesirable and not in accordance with best practice'. But he said Pidgley would be getting the money anyway.

That decision is likely to spark a revolt as investor lobby group the National Association of Pension Funds indicated it would still advise its members to vote against Pidgley's remuneration. His pay was signed off by former remuneration committee chairman Derek Sach, who resigned abruptly as a non-executive director in June.