Crest Nicholson risked the ire of the corporate governance lobby yesterday by elevating Stephen Stone, its chief executive since 2005, to executive chairman.
The housebuilder, which also is promoting Patrick Bergin to chief executive, said that the board had been “particularly mindful of the requirements of the UK corporate governance code in making these changes”.
It said that it had consulted extensively with leading shareholders “who were supportive of the changes” and was taking steps to ensure that there were more non-executives on the board than executive directors.
Crest Nicholson is a FTSE 250 housebuilder with a market value of £1.3 billion. It was founded as Crest Homes in 1963 and floated five years later. It has a southern bias, with projects ranging from contemporary, large-scale, mixed-use developments to smaller traditional housing schemes.
The governance code indicates best practice in the boardroom and frowns upon promoting chief executives to chairman, as they are not seen as independent. Companies must comply with the rule or explain why they have not.
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Crest Nicholson said yesterday that the board had been “unanimous that it would be in the best interests of the company for Stephen Stone’s expertise to remain within Crest Nicholson”. He will replace William Rucker, chairman since 2011, in March.
Mr Stone, a board member since 1999, will act in an executive capacity for the first 12 months working two to three days a week, on a salary of £300,000, and then will step down to non-executive chairman for a period of up to two years on £225,000 a year.
Mr Bergin, who will be paid a basic salary of £470,000, rising to £520,000 in the second year, has been with the group since 2006, rising to chief financial officer in 2011 and chief operating officer a year ago.
The company said that Leslie Van de Walle, a former chief executive of United Biscuits and Rexam, would join the board immediately as deputy chairman and senior independent director.
The company reported full-year results that were in line with expectations, with pre-tax profits up 6 per cent to £207 million in the year to the end of October, from revenues up 5 per cent at £1.04 billion. A final dividend of 21.8p makes a total of 33p, up 20 per cent.
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Crest Nicholson’s shares fell a halfpenny to 523½p.