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Shareholders reject Crest Nicholson’s pay report

FTSE 250 construction company Crest Nicholson, which emphasises its sustainable approach to housing developments, had its remuneration report rejected by shareholders at its AGM this week. There was a 58% vote against the non-binding annual remuneration implementation report. In a separate binding vote on the company’s remuneration policy there was a 96% vote in favour.

Crest Nicholson said: “Whilst we note that our Remuneration Policy continues to be well supported with a 96% in favour vote, we are disappointed the advisory vote for this year’s remuneration report was not carried.

Crest Nicholson logo

The company said that dialogue with shareholders before the AGM found that they were concerned about the profit before tax per share (the “PBT Element”) targets for the 2017-2019 Long-term investment plan (LTIP) which makes up 50% of the performance condition.

The company said the board expected the rate of profit growth to remain robust but not at levels seen in recent years due to tough comparators, additional investment in land, examining approaches to offsite manufacture and a new division required to support its stretching annual growth targets of 4,000 new homes and £1.4 billion of sales by 2019.

Crest Nicholson stated: “The PBT Element was agreed by the remuneration committee after taking into account those factors, and taking into account the uncertain economic backdrop and the competitive environment in which the Company operates. The remaining 50% of the LTIP is based on targets relating to return on capital employed, ensuring a balance of profitability and capital efficiency for shareholders. The Committee believes that this combination of measures presents a sufficiently stretching LTIP.”

Crest Nicholson

Sustainable homes builder Crest Nicholson: investors vote against its executive pay report

The company said that the board had a regular dialogue with  leading shareholders on a range of matters including remuneration. During the course of this year, it will continue this engagement with shareholders and will discuss remuneration arrangements and next year’s LTIP targets; and seek to better communicate underlying rationale to shareholders with earlier engagement.

Crest Nicholson’s stated ambition is to be the market leader in the design and delivery of sustainable homes and mixed use communities backed by a strong ethos to operate in a responsible and ethical way. The company said this means considering and managing the wider impacts of our business for our customers, communities and supply chain, as well as the environment.  

Manifest scored both Crest Nicolson’s Remuneration and Sustainability Governance at C
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