Berkeley group as a study of entrepreneurial leadership

Tony PidgleyBerkeley Group reports a profits surge as it prepares to enter the FTSE 100 index. This news is tempered by resistance from its instructional investors over its executive remuneration arrangements

The Berkeley Group corporate web page suggests this is a modern company complying with the ‘newer bottom lines’ of Corporate social responsibility. Its financial growth has been found attractive to institutional investors. Now the cachet of entry into the FTSE 100 as a solid blue chip company beckons.

Its situation is even more positive at present as government house building policies have given the sector a boost.

So why are its shareholders unhappy?

Why then are its institutional investors unhappy? The surface indication is an opposition to the remuneration package proposed for its executives.  Opposition came during the AGM to a plan that would pay the company founder and chairman Tony Pidgely 23m as part of a 42m bonus payout shared by the top five executives.  The packages could total £500m in the next six years.

To understand more about this, we need to examine the background to the entrepreneur Tony Pidgley, who has been well-documented for his public achievements and colourful private life.

Mr Pidgely has the characteristics of the textbook entrepreneur.  He survived the toughest of upbringings and left education with no qualifications. His first labouring work taught him survival skills. He moved on to owning a haulage firm which he sold to kick start more ambitious ventures. His financial success became entangled with a turbulent private life which ended with an acrimonious divorce. At one stage, his son Tony Pidgley Jr attempts to outflank Dad by a two billion pound sterling bid for the family firm. As also happens in the business movies, junior is soundly defeated. Tony Pidgley Snr continues his high profile private and business activities.

The Guardian, no friend of full-blooded capitalism, tracks his progress with a mix of admiration for his rags to riches story and a less approving reporting of his man (and woman) management skills, and scary leadership style.

Note for business students

The case may also be studied alongside that  of Mike Ashley, another successful and controversial entrepreneur. Mr Ashley is the successful founder of Sports Direct.

 

Members of Unite Union protested outside Wednesday’s annual meeting dressed in Victorian clothing demanding that staff be paid a living wage of £7.85 an hour. One institutional investor, Royal London Asset Management, voted against Mr Ashley’s re-election to the board.

Hamilton Claxton, corporate governance manager at Royal London – which owns about 1% of Sports Direct shares – said: “We have lost confidence in the board and are very concerned about the long list of corporate governance failings that have not been addressed.” It was particularly concerned over Mr Ashley’s attendance record at board meetings.

 

 

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