The announcement by Jeff Fairburn, chief executive of housebuilder Persimmon that he will give a “substantial” part of his £110m bonus away is the correct thing to do.

Although technically speaking he is entitled to the windfall as part of £500m that will be distributed to 140 employees of the company- it is right that he donates part to charity.

The uncapped bonus may have been drawn up before he became chief executive in 2013, but there are a number of reasons why such a sum is inappropriate in this day and age.

Firstly there is the suggestion that bonuses on this scale undermine long term value creation when it’s then harder to motivate senior staff- just consider the problems around the incentivisation programme at Carillion.

Then there is also the detrimental effect on staff that don’t get a bonus but have contributed to the group’s strong performance- issues of inequality are being discussed with some voices calling for maximum ratios between best and average and worst paid in organisations.

Then there is the societal impact such bonuses have- in an age of continued austerity. There are also the voices of those who question the hoarding of land by the housebuilding industry, who might make capital from this issue.

All in all, such a bonus becomes difficult to defend as the business community fights harder than ever to explain its role in society.