Persimmon boss Jeff Fairburn asked to leave over £75m bonus backlash

Mr Fairburn walked out of an interview last month when asked about his bonus

Construction group Persimmon has announced that chief executive Jeff Fairburn is stepping down due to the continued “negative impact” that his £75m bonus has had on the business.

Mr Fairburn is leaving “by mutual agreement and at the request of the company”, according to a statement to the London Stock Exchange, and will depart his role at the end of the year.

The building boss was awarded the bonus as part of a long-term incentive plan, which effectively hands over 9 per cent of Persimmon’s shares – worth hundreds of millions of pounds – to senior managers over a decade.

He was originally granted a £100m bonus, but after a public backlash agreed to reduce that sum by 25 per cent.

However, Mr Fairburn recently walked out of an interview after being questioned about the payout, leading to further publicity about the bonus, by far the largest paid to the boss of a public company in the UK last year.

Persimmon said on Wednesday that the board “believes that the distraction around his remuneration ... continues to have a negative impact on the reputation of the business and consequently on Jeff’s ability to continue in his role”.

Mr Fairburn said: “It has been an honour to lead Persimmon through an exciting period of development. I had hoped that revealing my plans to create a charitable trust and to waive a proportion of the award would enable the company to put the issue of the 2012 LTIP behind it.

“However, this has not been the case and so it is clearly now in the best interests of Persimmon that I should step down. I wish the company the very best for the future.”

David Jenkinson, currently group managing director, will be appointed as interim chief executive on 31 December, and the board has begun a formal recruitment process to hire a permanent replacement.