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Crest Nicholson surges as it nabs Galliford Try's chief executive officer

The managerial merry-go-round does another circuit. Expect a bit of comment in the press about directors' remuneration.

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Chief executive Peter Truscott has upped sticks from Galliford Try plc (LON:GFRD), the housebuilding and regeneration group, to join sector peer Crest Nicholson PLC (LON:CRST).

Truscott will succeed Patrick Bergin at Galliford Try but not until September of this year, which is when his contract with Galliford Try expires.

READ Crest Nicholson still struggling in London but says build cost inflation has moderated

Despite the government bending over backwards to help the housebuilders with its “Help to Buy” scheme (dubbed “Help to Profit” by satirical magazine Private Eye), Crest Nicholson saw profits slide in the year to the end of October 2018 and its margins have been under pressure.

The chief financial officer walked the plank in October and now the chief executive has gone.

Until Truscott gets his feet under the desk, Chris Tinker, currently the chairman of Major Projects and Strategic Partnerships at Crest, will become the interim chief executive.

"We announced last year that we were shifting strategy from growth to cash generation with a strong emphasis on partnerships and other joint ventures, to de-risk the portfolio while delivering more homes,” said Stephen Stone, Crest’s chairman, as he welcomed Peter Truscott to the team.

“Peter is highly experienced at delivering a broad range of housing needs to customers working with Local Authorities, Housing Associations as well as private home buyers. This, together with his operational and public company experience, will bring strong additional expertise to our team,” Stone said.

Truscott will have a starting salary of £650,000 per annum – chicken feed by the standards of sector peer Persimmon – augmented by a pension contribution of 10% of salary and a “bonus opportunity” of 125% plus various other potential cash kick-ins under the company’s long-term incentive plan.

Crest said the package has been designed with reference to his compensation at Galliford Try and the Remuneration Committee is “satisfied that it is paying no more than is necessary to attract a candidate of Peter's calibre”.

He is also receiving a package to compensate him for various shed-loads of money he would have got had he stayed under contract to Galliford Try rather than electing to seek his fortune elsewhere.

Interim chief executive Chris Tinker will see his annual salary increased to £430,000 from £311,212, while his bonus potential has been increased to 100% of salary to 125%.

The chairman, Stephen Stone, will also get a boost to his bunce, with his fee rising to £260,000 a year during the period when he will be taking on extra responsibilities pending the arrival of Truscott.

Departing CEO Patrick Bergin, who had held the CEO post for just a year, will receive a pay-off in line with the company’s directors' remuneration policy.

The company released a trading statement ahead of today's annual general meeting in which it said its forward sales position is encouraging, with more than 50% of its open market sales targeted for the year having been secured.

“At £686m, our total forward sales positions us well to deliver both revenue and volumes similar to last year and continue to improve our cash generation,” the company said.

Meanwhile, Galliford Try has promoted group finance director Graham Prothero to the position of chief executive officer.

Andrew Duxbury, currently the finance director of the group’s Linden Homes arm, will succeed Prothero as group finance director and will join the board of directors.

"I have enjoyed my time with the group,” revealed Truscott, before embarking on extended gardening leave.

“The company has a strong management team and a clear growth strategy against which it is making good progress. The decision to leave is a personal one and has been made so that I may pursue other opportunities," Truscott said.

Shares in Crest Nicholson were up 7.3% at 378.6p while Galliford Try's shares fell 3%.

Quick facts: Crest Nicholson

Price: 214.2 GBX

Market: LSE
Market Cap: £550.32 m

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