Foxtons faces backlash over handing boss a £1m bonus

The boss of Foxtons is facing mounting pressure to hand back his £1million bonus and return Government support used during the pandemic.

Nic Budden was handed a bonus of £389,300 and £569,000 in shares for 2020, meaning on top of his salary his total pay package grew to £1.6million compared to £1.25million the previous year.

This is despite Foxtons tapping taxpayers for £4.4million in furlough money and £2.5million in business rates relief during the pandemic. 

The company also went cap in hand to shareholders for £22million in April last year to shore up its balance sheet.

And it has not been shy to splash the cash, buying Douglas and Gordon for £14.25million and ploughing £3million into property portal Boomin, which was set up by Purplebricks founder Michael Bruce. 

As a result advisers to Foxtons’ shareholders, Glass Lewis and ISS, have called on investors to oppose the remuneration report at the AGM this month. 

ISS said: ‘There is a material disconnect between bonus outcomes and company performance. 

‘Some investors may question the appropriateness of awarding bonus payments to the executive directors before paying back the Government support received.’

Glass Lewis wants Budden’s bonus slashed altogether. It said: ‘Given the shareholder and wider workforce experience, there is no reason as to why the company could not reduce the bonus to nil.’

Rivals in the industry, including Winkworth, have paid back furlough cash as have builders such as Barratt and Taylor Wimpey.

The furlough scheme has cost the Government £58billion, while business rates relief will be worth £16billion by the time the scheme ends. 

Chancellor Rishi Sunak extended the furlough scheme until the end of September during his Budget announcement on March 3.

He said the scheme – which pays 80 per cent of employee’ wages for the hours they are unable to work – would help Britons through ‘the challenging months ahead’.

Employers are, however, expected to contribute 10 per cent towards the hours their staff are unable to work from July, and this will increase to 20 per cent in August and September.      

But despite the pressure Foxtons has stuck by the bonus payment.

It said: ‘We believe it’s right to reward hard work and results in a year when the business did well in very tough circumstances. 

‘We were very grateful for Government support which we used for as short a period as possible but entirely as it was intended – to keep people in jobs during a lengthy closure.’

Last year, Foxtons reported a 12 per cent fall in revenues to £93.5million but its pre-tax loss narrowed from £8.8million to £1.4million. 

Yesterday, it posted a 24 per cent jump in revenues for the first three months in 2021 as sales boomed. 

The property market has returned to near normal, egged on by Rishi Sunak’s extension of the stamp duty holiday until the end of June.

The group’s cash position at the end of March was £22.3million.

The company has had a sharp fall in its share price – from 94p before the pandemic to 65p now.      

The latest furlough row comes after it emerged Wetherspoons founder and chairman Tim Martin pocketed millions of pounds from selling shares while his pub chain was claiming government cash.    

Mr Martin, who still owns more than a fifth of Wetherspoons, sold £50 million worth of shares in January. 

Government data shows the business claimed more than £25 million in furlough money in the same month.

The outspoken businessman is now facing calls to hand back the furlough funds. 

Tory MP Sir Bob Neill said: ‘A number of reputable firms have returned furlough cash if they have managed to weather the Covid storm better than expected, and they’ve been applauded for it.

‘Perhaps Mr Martin might consider following suit.’

Labour MP Dame Margaret Hodge said it was ‘quite right that we set up a scheme that saves jobs’ but added: ‘He’s made £50 million from a share sale, then takes £25 million from the furlough scheme. Is that a thank you?’ 

Wetherspoons, which has 875 pubs, claimed more than £97 million in the six months to the end of January, during which time its sales plummeted by over half.

A Wetherspoons spokesman said: ‘We are a huge net contributor to the Treasury. Even in the last financial year, when pubs were closed by the Government for a long period, Wetherspoons paid £436.7 million in taxes, in spite of making a loss of £89.6 million.’

Elsewhere, the Co-op recently said it would repay the £15.5 million it received in furlough during the height of the pandemic – but stopped short of handing back the £66 million it secured in business rates relief.

More than £2 billion in rates relief has been handed back to the government by other essential retailers who continued to trade during lockdown measures.

Asda announced it will hand back £340 million saved in business rates relief, Sainsbury’s said it would return £440million, while Tesco and Morrisons agreed to respectively return £585 million and £274 million.

Aldi also announced that they too will hand back around £100million saved in business rates relief – bringing the total across retailers to £1.7billion.

But the Co-op announced last week that they would not be returning the business rate relief at the same time as it revealed its revenues increased by 5.5 per cent to £11.5 billion during the year to January 2.  

Co-op chief executive Steve Murrells said he believed the move to hold onto the property tax relief was still ‘in line with our ethics’.

‘It was a decision supported by the board and our membership counsel,’ he said.