Purplebricks’ annual report has revealed that a short term bonus scheme to provide incentives for executive directors to meet financial and strategic objectives has seen more than a five fold increase in sums paid this year.
In the year to the end of April 2020 the payment was £100,000 - but in the year to the end of April 2021 the figure was £530,000.
In addition, during the year to the end of April 2021 pension contributions of £17,000 were paid to executive directors - that’s up from £10,000 the year before.
The report also shows that between May and July 2020 the executive leadership team of the company agreed to accept a voluntary pay reduction of 20 per cent, in light of the reduced activity in this period with the housing market lockdown.
Looking at the current financial year, the report says: “Considering strong performance in the round, the group’s financial resilience and the importance for the group of their personal leadership in the year, we considered the outcomes of £285,000 for [group chief executive] Vic Darvey and £245,000 for [group chief financial officer] Andy Botha as appropriate.”
A week ago, in a separate announcement, it was revealed that almost a million shares in Purplebricks had been awarded - Darvey received 735,437 option shares and Botha got 307,500. They can be cashed in after three years subject to the pair still being at the agency and meeting performance thresholds.
Purplebricks’ remuneration committee - chaired by non-executive director and IT entrepreneur Simon Downing - says in the annual report that its objectives include: “to ensure the remuneration package of the Executive Directors is balanced between fixed and performance-related elements, and is sufficiently competitive to attract, retain and motivate Directors of the right calibre to achieve the Company’s objectives without making excessive payments; and to ensure that the Company’s share plans operate appropriately and align all participants to the delivery of the Company’s strategy.”
Purplebricks’ AGM in September will be the first time that shareholders in the company will be asked to vote to approve the Directors’ Remuneration Report, by way of an advisory non-binding ordinary resolution.
Early this month Darvey announced he was launching what he called “Purplebricks 2.0” after achieving “the right management team, right strategy and right technology to continue to grow the business.”
That strategy included a new ‘no sale, money back’ pricing policy - subject to strict rules for the vendor - and the introduction of ‘bundles’ of add-on extras.
There will be an increased emphasis by the agency on proving its local connections, in the form of a local marketing blitz to begin after the Olympics.
You can see the full Purplebricks annual report if you click on a link here.