The Association of British Insurers issued its rare ‘red-top’ corporate governance warning to the company’s shareholders over the restructuring scheme at Berkeley. The group is planning to scale back on its traditional house building business and concentrate on the regeneration of brownfield areas in inner cities. As part of the plan, Berkeley’s executive directors would take control of 15% of the restructured business.
Group FD Rob Perrins will see his stake in the company grow from 0.023% to 3%, while MD Tony Pidgley will see his holding rise from 1.66% to 8%.
‘This is out of the ordinary,’ said a spokeswoman for the ABI. ‘Incentives like this should be strongly linked to performance, but in this case that link does not appear so strong. We are concerned that it oversteps the mark.’
The group also raised concerns that the company’s management team, which currently owns 2%, will also be allowed to vote on the proposals. The ABI is advising shareholders to vote against the incentive scheme at an extraordinary meeting to be held on 17 September.