Purplebricks facing shareholder revolt over top brass bonuses

Purplebricks is reported to be facing a shareholder revolt this coming week at its annual general meeting because of bonuses paid to senior management.

The Sunday Times says the shareholder advisory service ISS is urging investors in the troubled hybrid agency to vote against the management’s financial statements at its AGM on Thursday. 

ISS says the firm's management incentive awards are not “subject to any performance hurdles.”  

Purplebricks told the Sunday Times that it needed to “attract and retain the appropriate calibre of individual” and that its executives were “not especially well paid.”

Former chief executive Michael Bruce is reported to have received £273,000 last year: documents going to shareholders are likely to include details of other payments to past and present executives at the agency.

Long term investors in the agency will have seen a rollercoaster share price ride - most recently in a broadly downwards direction.

Having launched to the London Stock Exchange at 100p a share almost four years ago, in December 2015, the price reached its highest ever level of 498.5p in late July 2017 before a long slide downwards; it closed on Friday at 111.8p.

Earlier this month the beleaguered fund manager Neil Woodford reduced his interest in the company from 19.25 per cent to 17.64 per cent. As recently as early June Woodford owned almost 29 per cent.

Days earlier the share value rallied temporarily following speculation that the German publishing giant Axel Springer was considering buying it; that company is already the largest investor by some margin, with over 26 per cent of its shares.

In the spring Axel Springer effectively doubled its stake in the agency when it bought the shares of founders Michael and Kenny Bruce, and Michael’s wife Isabel.

Purplebricks is not the only estate agency where a declining share price has prompted shareholders revolts.

In May the Annual General Meeting of Foxtons shareholders in London saw a dramatic rebellion against bonuses for senior management; chief executive Nick Budden and chief finance officer Mark Berry were awarded £389,000 in bonuses for 2018, up from £371,000 the previous year.

And in the summer of 2018 a Countrywide senior management bonus plan was scrapped after  its was discovered that executive chairman Peter Long could have received stock worth well over £6m, while Paul Creffield, the group managing director, and chief financial officer Himanshu Raja could have received shares valued at more than £8m and £7m respectively.