Foxtons faces a backlash when he hands the boss a £ 1m bonus after tapping taxpayers for £ 4.5m vacation pay
- Nic Budden received a bonus of £ 389,300 and £ 569,000 in shares for 2020
- His total wage package rose to £ 1.6m from £ 1.25m in 2019
- Foxtons received around £ 4.4 million vacation pay during the pandemic
The Foxtons head is facing mounting pressure to return his £ 1 million bonus and return government support used during the pandemic.
Nic Budden received a bonus of £ 389,300 and £ 569,000 in shares for 2020, which means his total wage package on top of his salary increased to £ 1.6m from £ 1.25m last year.
This is despite the fact that Foxtons tapped taxpayers for £ 4.4m vacation pay and £ 2.5m for relieving business rates during the pandemic.
Bonus series: Foxton boss Nic Budden (pictured) received a bonus of £ 389,300 and £ 569,000 in stocks for 2020
The company put a £ 22m cap on shareholders in April last year to prop up its balance sheet.
And they weren’t shy about injecting the cash to buy Douglas and Gordon for £ 14.25 million and plowing £ 3 million into Boomin, the real estate portal set up by Purplebricks founder Michael Bruce.
As a result, advisors to Foxtons shareholders, Glass Lewis and ISS, urged investors to oppose the compensation report at this month’s general meeting.
ISS said, ‘There is an essential separation between bonus results and company performance.
“Some investors may question the adequacy of granting executive directors bonuses before repaying government support received.”
Glass Lewis would like Budden’s bonus to be reduced overall. It said, “Given the experience of shareholders and the wider workforce, there’s no reason the company couldn’t reduce the bonus to zero.”
Competitors in the industry, including Winkworth, have paid back vacation pay, as have construction companies like Barratt and Taylor Wimpey.
The vacation program cost the government £ 58 billion, while the relief on corporate rates will be worth £ 16 billion by the end of the program.
Chancellor Rishi Sunak extended the vacation program until the end of September during his budget announcement on March 3rd.
He said the system, which pays 80 percent of workers’ wages for the hours they cannot work, would help the British during the “challenging months”.
However, employers are expected to contribute 10 percent of their employees’ working time from July onwards. That number will rise to 20 percent in August and September.
But despite the pressure, Foxtons stuck with the bonus payment.
It said, “We believe it is right to reward hard work and results in a year when business has been good in very difficult circumstances.
“We were very grateful for the government support, which we took as briefly as possible, but as intended – to keep people at work during an extended shutdown.”
Last year Foxtons reported a 12 percent drop in sales to £ 93.5m, but pre-tax loss decreased from £ 8.8m to £ 1.4m.
Yesterday, the company saw sales jump 24 percent in the first three months of 2021 as sales were booming.
The real estate market has returned to normal, triggered by Rishi Sunak’s extension of the stamp duty vacation until the end of June.
The Group’s cash position at the end of March was £ 22.3 million.
The company’s share price has fallen sharply – from 94p before the pandemic to 65p now.