x
By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards

TODAY'S OTHER NEWS

£1m bonus package for Foxtons boss despite huge shareholder rebellion

Controversial Foxtons chief executive Nic Budden is to pocket a bonus package of around £1m - despite a huge shareholder rebellion at the company's AGM. 

The controversy centres on the bonus being issued to Budden while at the same time Foxtons has been taking millions of pounds in taxpayers’ money in the form of business rate exemptions and furlough funding; unlike several other agencies, it has shown no sign of returning the public money.

Whereas most motions at the AGM on Thursday received 95 to 99.9 per cent backing from shareholders, there were a small number of obvious exceptions.

Advertisement

The remuneration proposal - containing Budden’s bonus - won only 60.63 per cent support. And the re-appointment of Budden himself as a director won only 82.83 per cent backing. Meanwhile non-exec director Alan Giles, who heads Foxtons remuneration committee, won only 67.41 per cent backing from shareholders for his re-election. 

A statement from the Foxtons board attempted to justify the bonus to Budden, and made no comment on the public funds.

It says: “It is clear that a significant proportion of shareholders did not agree with the decision to pay bonuses to Executives under the Bonus Banking Plan, on the basis that the company had benefited from Government support. This is notwithstanding that discretion had been exercised to reduce bonuses that would otherwise have been earned against agreed performance conditions by 50 per cent, a decision that was supported by the majority of voting shareholders.

“This resulted in a bonus for the CEO of £389,000, which was 33 per cent lower than the previous year and 53 per cent lower on a cash basis. The new 2020 remuneration policy was designed to better align executives reward with shareholders’ interests. However, in light of the votes against Resolutions 2 and 6 the Remuneration Committee will review the remuneration policy and its implementation in consultation with shareholders to ensure executive remuneration drives long-term shareholder value and stakeholder interests.”

Criticism of Budden amongst shareholders has in recent weeks been led by veteran agent Robin Paterson, now regarded of an 'activist shareholder' in Foxtons - as he was in Countrywide prior to the revolt that led to its purchase by Connells.

Paterson’s group, Catalist, issued a statement after the Foxtons AGM vote. It said: “Today’s vote must serve as a wake-up call for the board. Shareholders are alert to the culture of entitlement that has squandered the company’s many advantages, and confirms the need for incentives linked to new, objective and ambitious targets.

“That so large a proportion of shareholders chose to vote against the renumeration package and the re-election of both the REM committee chair and CEO, can’t be ignored. The Board must act.

“Foxtons has a strong brand and great potential but years of underperformance can and must be reversed.  We have identified to the board actionable steps that we believe would address this decline, and in doing so, the company’s leadership should rightly be rewarded, but for clear outperformance, not just riding the wave of a market recovery.

“We hope today’s vote will encourage the company to urgently engage with us and other shareholders to set Foxtons on a path to rejoining the FTSE250.”

In a letter sent to Budden last week, Paterson said that benchmarking compensation to a FTSE 250 company was reasonable only if it was matched by financial performance.

Catalist has built a two per cent stake in Foxtons and says it’s been trying to engage with the agency’s management team, having written to the company twice this year – in February and on Tuesday last week.

A spokesperson for Catalist told Estate Agent Today it wants “to try to get the management to amend its strategy” as they believe it is significant undervalued relative to its potential. 

  • icon

    Maybe Paterson should have focused on his own agency business at Sotherby's. Didn't they go bust? However, Foxtons should hand back the furlough money.......

  • Algarve  Investor

    Foxtons has always had no shame - it's their whole USP - but this really takes the biscuit. Sticks in the craw that he gets such a high bonus when they've used taxpayer cash to tide themselves over recently.

    Foxtons should take a leaf out of Belvoir's book and pay back what they received. It's not exactly like the company is struggling to survive.

    A fair old shareholder rebellion, but I wish it had been larger. As the ESL has shown in recent days, the tolerance for the fat cats in these times is very low. Being out of touch and elitist is not a good look.

  • Mark Townend

    Humiliated? No doubt the £1 million bonus package will soften that blow. Poor thing.

  • icon

    Taking Furlough money - taxpayer money used by our Government in good faith to avert an impending financial disaster should be paid back in good faith by companies who in retrospect have benefited from the pandemic environment IMO.

    Foxtons not only took the money, they then tapped up institutional shareholders and went on a buying spree taking at least three independent agents, including Douglas & Gordon.

    All with rental books to help prop up the main business that seems to me to a complete shadow of its former self in terms of staff numbers - the branches seem dead when I am in London.



  • icon

    There are much larger agencies that have yet to do the decent thing -Foxtons only in spotlight as a listed firm

  • icon

    Interestingly, Foxton's have increased their market share by 16.7% in the last 2 years (Market Share 2018 3.921% vs 4.576% in 2020)

    N NW SE SW E Postcodes 2018 vs 2020 using Rightmove Market Share Data for Resi Sales Listings

  • Andrew Stanton CEO Proptech-PR    Proptech Real Estate Influencer

    16.7% from a low base though Chris. Foxtons need a complete re-think, like most companies every decade you need to re-fresh or throw in the towel.

icon

Please login to comment

MovePal MovePal MovePal
sign up