Cairn Homes says it has 'right balance' as pay of top executives attacked
Cairn Homes has defended the pay of its top executives.
Chairman John Reynolds, the former head of KBC Bank Ireland, said he believed the company had "struck the right balance" in answer to a shareholder who criticised the pay awarded to directors.
Cairn became the first Irish housebuilder to go public in nearly two decades when it listed in London last year.
Around 13pc of shareholders voted against the remuneration report proposed for 2016 at the housebuilder's annual general meeting yesterday.
The majority of shareholders backed the pay plan, which would award chief executive Michael Stanley an "annual incentive payment" up to 105pc times his 2016 salary of €425,000 based on performance targets.
Executive directors could receive incentive payments up to a maximum of 75pc of salary, plus potential share awards as part of a long term incentive plan.
That does not apply to founders Michael Stanley and Alan McIntosh who already have significant stakes in the company and are entitled to 20pc of shareholder gains if its share price rises more than 12.5pc per year. In an update released before its AGM, Cairn said it had taken direct ownership of seven sites attached to the "Project Clear" loans it bought from Ulster Bank at the end of last year, about one third of the portfolio by value.
It spent around €378m on the Ulster loan portfolio, which had a par value of €1.75bn. It is aiming to take ownership of 90pc of all sites linked to "Project Clear" loans by the end of the year. "We are not expecting any issues with the final 10pc," Mr Stanley said. Cairn now has 25 "core" development sites under its control with the capacity to deliver 11,000 homes, he said.
Some 8-10 other sites have been classified as "non-core" and may be sold off. "Our model is focused on larger sites where we can get economies of scale," said Mr Stanley. "Some of the smaller sites may be sold off."
Cairn reiterated its aim of delivering 1,200 homes a year by 2019. It closed sales for 11 homes in 2015 and has closed 35 in 2016 so far. It will be building on up to eight sites by early next year.