Your vote counts: should this housebuilder's boss earn seven figures?

Another eye-popping pay deal is put to the vote, but this one stands a good chance of getting waved through. Here's why.

The £1.4 million pay of Crest Nicholson (LSE:CRST) boss Peter Truscott will be up for approval when the housebuilder's AGM takes place later this month.

Truscott, who joined the company from Galliford Try (LSE:GFRD) in September 2019, got a bonus of £683,000 after he passed thresholds on profits, cash generation and cost savings. Shares rose 62% in the financial year, while Crest also restored dividend payments. 

His pay deal is part of the remuneration report that will be put before shareholders for approval in an advisory vote at the AGM in Surrey on 22 March.

Crest Nicholson

When: 10am, Tuesday 22 March

Where: Crest House, Pyrcroft Road, Chertsey, Surrey KT16 9GN

How to participate: Proxy voting forms need to be returned no later than 10am, Friday 18 March. The deadline for asking questions in advance of the AGM has passed but the company intends to publish replies on its website no later than Tuesday, 15 March. More details on the AGM can be found here.

Who’s in the chair? Iain Ferguson, the former Tate & Lyle chief executive, has been chairman since September 2019.

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How did the company do in the year to 31 October? Revenues rose 16% to £786.6 million, reflecting strategic progress and housing market strength. A big improvement in operating margin meant adjusted earnings per share more than doubled to 27.6p, enabling the builder to declare a resumed final dividend of 9.5p a share for payment on 8 April. The group repaid the £2.5 million received under the Covid-19 Job Retention Scheme.

How did shares perform? Up 62% to 356p (281.6p on Thursday).

How much is the boss paid? Peter Truscott’s total remuneration came to £1.4 million, including a basic salary for the year of £650,000. His bonus award of £683,000 amounted to 84% of the total opportunity following strong performances in terms of profits, cash generation and cost savings. Share awards under the long-term incentive plan lapsed after Crest missed three key targets, including earnings per share growth.

What’s the view of voting agencies? Glass Lewis believes performance criteria for long-term incentive scheme awards should be measured over the entire three-year period rather than just at the end. Overall, it believes that the company’s remuneration policies appear to satisfy best practice guidelines and that shareholders should support the advisory vote on the annual remuneration report.

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What happened at last year’s AGM? The remuneration report was supported with 98% of votes in favour.

How is the company doing on diversity? The board meets the Hampton-Alexander requirement for at least 33% of roles to be held by women. The company has a target for at least one director from an ethnic minority background by 2024.