Builder takes £42m hit over bonus scheme
Luxury home-builder the Berkeley Group will take a £42m accounting charge as a result of a controversial bonus scheme that will hand four directors 15% of the company in 2011.
The company, run by Tony Pidgley, will take the hit for its new long-term incentive plan, which is linked to a proposal to return £12 a share to investors over the next six years.
Finance director, Rob Perrins, told The Times newspaper that it would cost the firm about £7m a year until January 2011, which would affect headline profit and earnings per share each year. But he said the charge had no relevance to the cash performance of the business.
He said that the charge was high, and criticised the accounting regulations under which Berkeley was forced to make the charge.
‘I don’t think it’s a very good accounting standard that links ownership of the business to profits,’ he told the paper.