Berkeley in £100m bonus row

SHAREHOLDERS in luxury housebuilder Berkeley have vote through a controversial executive incentive scheme that could be worth more than £100m for four directors.

Berkeley investors were being offered the chance to take £1.45bn of cash, worth about £12 per share, over the next six years which they have generally welcomed - but execution of this restructuring plan depended on their approving the incentive scheme.

Several large investors expressed disapproval ahead of today's extraordinary general meeting which hands senior management, including founder and managing director Tony Pidgley, 15% of the remaining company.

Influential investor body the Association of British Insurers gave the bonus plan a 'red top' alert, indicating its highest level of concern, and 1.6% shareholder Isis Asset Management said it had 'serious reservations', echoing concerns raised by 3.3%-holder Morley Fund Management.

Pidgley is in line to add an 8% stake in the company, worth about £56m, based on analysts' estimates of a scaled-down Berkeley being worth £700m. This is on top of the £24m Pidgley would pick up from the cash return from the 2m shares he owns.

The National Association of Pension Funds advised its members to back the plan. Berkeley's largest investor, Saad Investors, a 12.6% shareholder, and 1.6% shareholder Scottish Widows back it.

Approval for the scheme required a straight majority while the cash return needed a 75% vote. In the event, 92% voted in favour of returning cash to shareholders and 78% voted in favour of the incentive scheme.

BHP Billiton chief executive Chip Goodyear received £2.4m last year, a 25% increase. The pay details emerged as the Anglo-Australian miner proposed a revised incentive executive package that could deliver an avalanche of payments to executives if they meet performance hurdles over the next five years.