THE controversial boss of York-based housebuilders Persimmon has stepped down, due to the "negative impact on the reputation of the business" following a £100m bonus.

Jeff Fairburn hit the headlines earlier this year after uproar from politicians and shareholders over his £100m, leading to him voluntarily handing back £25m.

However, Persimmon announced today that Mr Fairburn was to step down as group chief executive "by mutual agreement and at the request of the company", after five years in the role.

A spokesman said his departure the company's board "believes that the distraction around his remuneration from the 2012 LTIP scheme continues to have a negative impact on the reputation of the business and consequently on Jeff’s ability to continue in his role".

David Jenkinson, currently group managing director, will be appointed to Mr Fairburn's post and will assume his new role on December 31, followed by a formal process to select a permanent successor.

Roger Devlin, Persimmon’s Chairman, said: “Under Jeff’s leadership Persimmon has sold more than 74,000 homes across the UK while more than doubling in size, increasing its market capitalisation from £3.4 bn to £7.5 bn, returning over £2.2bn to shareholders and producing industry leading margins and returns on capital.

"However, given the continuing distraction around the scale of his remuneration resulting from the 2012 LTIP, the Board believes that it is now necessary for there to be to be a change of leadership. On behalf of the Board I would like to thank Jeff for his significant contribution to the business over a 29 year period.

"David is an experienced operator in the housebuilding sector and has made a significant contribution to Persimmon in a number of senior roles, particularly in land purchasing. I am grateful that he has agreed to take on the role of interim CEO."

Jeff Fairburn said: "It has been an honour to lead Persimmon through an exciting period of development. I had hoped that revealing my plans to create a charitable trust and to waive a proportion of the award would enable the company to put the issue of the 2012 LTIP behind it.

"However, this has not been the case and so it is clearly now in the best interests of Persimmon that I should step down. I wish the Company the very best for the future."

Persimmon said a settlement agreement had been made with Mr Fairburn for when he leaves the company on December 31.