The owner of British Gas is facing a potential shareholder revolt this week over its chief executive’s £8.2m pay packet.
Centrica boss Chris O’Shea said in January there was “no point” in trying to justify his pay and bonus at a time when homeowners are dealing with soaring utility bills.
A showdown between the company’s top brass and investors will take place at its annual general meeting (AGM) on Wednesday.
The Pensions and Investment Research Consultants (PIRC), a major proxy advisor, has encouraged shareholders to vote against O’Shea’s pay award in 2023.
Last year, the energy executive raked in a base salary of £810,000, a £1.4m annual bonus and a £5.9m long-term bonus deal, alongside pension and benefits.
The award comes amid growing City backlash against FTSE chiefs pay, which proxy advisors like Glass Lewis and the ISS have described as “excessive.”
Chief executive remuneration packets at Astrazeneca, Wizz Air, the London Stock Exchange Group and Clarkson have all sparked criticism in recent months, but some in the City argue high pay is necessary to stop top-level talent moving abroad.
O’Shea has led the British Gas owner since 2020. In 2019, as chief financial officer, he did not take a bonus award. He also refused payouts in 2020 and 2021 due to the “hardships” faced by his customers.
The company’s annual report said the pay rise was down to Centrica’s “continued improvements in underlying performance and substantial share price growth.”
British gas saw profits rise more than tenfold in 2023, from £75m to £751m, and shares are up over 17 per cent in the last 12 months.
However, the energy firm was mired in scandal after it was revealed British Gas debt collectors had forced entry into the homes of vulnerable and elderly people to install meters.
The revelations, which led to a sector-wide ban on prepayment meter fittings, resulted in O’Shea’s bonus being docked 10 per cent.