Bellway directors' £600,000 bonuses prompts 'red top' alert

The noble art of trousering seems unaffected by the dire state of the housing market with Bellway’s top executives enjoying a total of £600,000 of performance bonuses… despite the house builder’s share price falling by 25% last year and sales tumbling by 50%.

The move has triggered a 'red top alert' from the Association of British Insurers which is less than happy with the situation.

The Financial Times quotes Peter Montagnon, director of investment affairs at the ABI, as saying that there had been “a breach of best practice” and shareholders should take this into account when they vote on the remunerations later this month.

If the red top alert is heeded then the gathering could prove to be a stormy session.

The FT adds further comments from Montagnon saying: “Management had targets and abandoned them when it became clear they were not going to meet them. They decided to pay bonuses anyway.

The take from Bellway is that given the terrible state of the housing market, the group’s remuneration committee felt the top brass deserved a reward for boosting the group’s cash and cutting debt rather than “meeting an arbitrary profit target”.

Bellway reckons that the bonuses were based on the company’s financial performance and the sums take into account the relative performance of Bellway compared with its rivals.

The happy lads were:

• John Watson, chief executive - £275,000 bonus
• Peter Stoker, commercial director - £178,500
• Alistair Leitch, finance director - £178,500