British Gas boss secures £4.5m payout as Centrica wins over shareholders
The hefty £4.5m proposed pay-packet for the boss of British Gas owner Centrica has been backed by investors, after the energy giant quenched fears of a shareholder revolt today.
It pushed through chief executive Chris O’Shea’s bumper executive pay packet and the reappointment of its top executives with ease at its annual general meeting (AGM) in Leeds, despite initial fears of a more heated session between the board and shareholders.
The company swept aside investor concerns with its report for director pay receiving 94 per cent approval, while Chris O’Shea received the backing of 99.7 per cent of shareholders.
Shareholders also backed plans to bring back dividends at two pence per share.
All 21 of the company’s motions passed, with no vote receiving less than 92 per cent support.
O’Shea’s pay is a five-fold hike in on last year’s salary, and and follows Centrica unveiling record £3.3bn earnings last year, powered by soaring oil and gas prices after Russia’s invasion of Ukraine.
Ahead of today’s meeting, the FTSE 100 firm told investors it expects a hike in profits for its retail arm ahead of its interim results next month, due to reductions in debt-related costs.
Watchdog Ofgem provides an allowance in the price cap to account for debt that suppliers cannot recover from energy bills and has to be written off – with customers struggling during the energy crisis.
It now also predicts full year group-adjusted earnings per share to come near the top end of the 16.5 pence to 24.7 pence range it established earlier this year.
At the AGM, O’Shea told to shareholders he was “genuinely gutted” over the grim findings from The Times’ prepayment meter investigation, when it uncovered third parties working for British Gas were breaking into people’s homes to install prepayment meters at the homes of vulnerable customrs.
He said the company’s external probe found “no systemic issues” at British Gas but “there are clearly lessons to be learned”.
British Gas’s conduct is currently subject to an Ofgem review, with the watchdog now requiring all energy suppliers to sign up to a new code of practice before they can be used again.
The UK’s largest energy firm was responsible for over a quarter of forced prepayment installations, according to government data.
This includes new rules such as making at least 10 attempts to contact a customer before a prepayment meter is installed and exempting people over 85 years of age if there is no other support in the house.
In a later interview with The Financial Times, he warned that all households in Britain will face higher energy bills if suppliers are unable to prevent struggling customers from running up large debts.
He argued the government must find a fair way to spread the costs of supporting the most vulnerable in society.
“It’s all very well saying, we are going to stop X, Y and Z . . . [but] ultimately if you have people in categories where you can’t install a prepayment meter, then the general population is paying for their energy,” he said.