York-based housebuilder Persimmon said on Friday it will partially reduce controversial bonuses for its top executives following shareholder outrage at the package that could have seen Persimmon CEO Jeff Fairburn receive a payout of around £100 million.

Shareholders were also unhappy about potentially huge payouts for Persimmon chief financial officer Mike Killoran and group managing director Dave Jenkinson.

Analysts estimate that under the latest attempted compromise, Fairburn’s package would be cut to about £75 million, Killoran would receive about £24 million less than the £78 million he was set to pocket, and Jenkinson would see his bonus cut by £2 million to about £38 million.

Persimmon’s sixth-largest shareholder, Aberdeen Standard Investments, had called Fairburn’s potential bonus “grossly excessive” and had said it remained “a huge concern.”

Aberdeen Standard Investments had encouraged other shareholders to “consider their voting positions” on Persimmon’s board members, which include Fairburn, ahead of the Persimmon annual general meeting in April.

Euan Stirling, global head of stewardship at Aberdeen Standard Investments, had said Fairburn’s insistence in “extracting such a high proportion of the value that has been created is damaging, both financially and reputationally, to the company.”

Ashley Hamilton Claxton, head of responsible investment at Royal London Asset Management, another Persimmon shareholer, told Reuters: “Even after this reduction, in our view the scale of the remuneration on offer under this plan is still extremely generous given the government’s support for the sector through the ‘Help To Buy’ scheme …

“We hope the company and shareholders can now draw a line under this issue, allowing management to devote their focus solely to the running of the company.”

Adam Matthews of the Church of England, another Persimmon shareholder, said it continued “to have reservations regarding the proposed remuneration levels announced today” but was “pleased that the concerns of many investors have been heard by the board.”

Nonetheless, Persimmon on Friday defended the bonus plan put in place in 2012 as “a significant factor in the company’s outstanding performance.”

In a stock exchange statement, Persimmon said: “The board of Persimmon announces amendments to the 2012 Long Term Incentive Plan (2012 LTIP) entitlements for Jeff Fairburn, CEO, Mike Killoran, CFO, and Dave Jenkinson, group managing director.

“Under the terms of the 2012 LTIP, which was approved by 84.9% of shareholders voting at an EGM, rewards for the 133 participants vest in two tranches.

“The first of these (40% of the total), vested on 31 December 2017 and will be capable of exercise from next week onwards, following the announcement of the group’s results for the year ending 31 December 2017.

“The second and final tranche (60% of the total) will vest once the group has returned 620p per share in cash to shareholders, in line with the scheme rules.

“The executives have informed the remuneration committee of a series of decisions intended to reduce the scale of payments and extend the holding period under any second tranche …

“Jeff Fairburn and Mike Killoran have decided to reduce their overall entitlement by a number of shares equal to 50% of the shares to which they would become entitled on the second vesting.

“Additionally they have also decided to extend until 2021 the holding period applying to 50% of any shares under any second vest other than shares sold to cover tax liabilities.

“Dave Jenkinson has decided to reduce his overall entitlement by a number of shares equal to 50% of the shares subject to awards granted to him since being promoted to the board to which he would become entitled on the second vesting.

“In addition to the existing obligation to hold 50% of the shares from any second vest for 12 months, other than shares sold to cover tax liabilities, he has decided to extend until 2020 the holding period for 25% of  such shares.

“All three executives have decided to cap the value of any future exercise of the remaining second vesting entitlement to a maximum value equal to £29 per share.

“There will be no changes to the 2012 LTIP for other plan participants …

“The board believes that the LTIP put in place in 2012 has been a significant factor in the company’s outstanding performance.  

“In particular, it has contributed to industry-leading levels of margin, return on assets and cash generation.

“Nonetheless, it is clear that the absence of a cap, in recognition of which the chairman and former remuneration committee chair offered their resignations from the board on 14 December 2017, has given rise to the potential for pay-outs which, when triggered in full, will be significantly larger and paid earlier than might reasonably have been expected at the time the scheme was originally put to shareholders.

“These decisions by the executives have been welcomed and fully supported by the remuneration committee which has also noted Jeff Fairburn’s intention to donate a substantial proportion of his total reward to charity. 

“The board regards these decisions as an appropriate response by the executives.

“Accordingly, the board unanimously supports this amendment which it believes to be in the interests of the company as a whole.”