British Gas owner avoids shareholder revolt over CEO's pay packet

British Gas owner Centrica has fended off a potential shareholder revolt over its chief executive’s £8.2m pay deal last year, as campaigners branded the pay packet “fundamentally wrong”.

Chris O’Shea saw his pay package nearly double from £4.5m in 2022.

His latest deal for 2023 netted the chief executive an £810,000 salary, a £1.4m annual bonus and £5.9m in long-term bonus, pension and benefits.

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Pensions and Investment Research Consultants (Pirc), the shareholder advisory group, had advised investors to vote against Centrica’s remuneration report, including Mr O’Shea’s pay package, at the company’s annual general meeting.

British Gas owner Centrica has fended off a potential shareholder revolt over its chief executive’s £8.2m pay deal last year, as campaigners branded the pay packet “fundamentally wrong”. (Photo by Owen Humphreys/PA Wire)British Gas owner Centrica has fended off a potential shareholder revolt over its chief executive’s £8.2m pay deal last year, as campaigners branded the pay packet “fundamentally wrong”. (Photo by Owen Humphreys/PA Wire)
British Gas owner Centrica has fended off a potential shareholder revolt over its chief executive’s £8.2m pay deal last year, as campaigners branded the pay packet “fundamentally wrong”. (Photo by Owen Humphreys/PA Wire)

But 90.1 per cent of shareholders voted in favour of the measures, with 9.9 per cent voting against.

Mel Evans, Greenpeace UK’s climate team leader, said: “This is a direct transfer of wealth from people struggling to pay their bills to energy bosses and their shareholders.

“It’s fundamentally wrong that Chris O’Shea is able to profit obscene amounts from an energy crisis that hits ordinary people hardest.

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“And it is yet more evidence that our energy system is not fit for purpose.

“We desperately need an energy system fit for the 21st century, one powered entirely by cheap renewables that would lower peoples bills, give us energy security, and help the climate at the same time.”

Mr O’Shea said in January there was “no point” trying to justify his 2022 salary, which sparked controversy as households across the UK suffered amid painfully high energy bills.

He described his combination of salary, bonus and shares as “a huge amount of money” at the time, and said he was “incredibly fortunate”.

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That was before Centrica announced his 2023 pay packet of £8.2m, up £3.7m on the 2022 deal.

Most of the increase comes from the chief executive’s long-term bonus, which rose mainly because of Centrica’s rising share price in the last three years.

Centrica’s adjusted profit fell to £2.8bn before tax last year, compared with £3.2bn the year before, the business revealed in February. Its retail arm, which is mainly made up of British Gas, saw profit soar from £94m in 2022 to £799m last year. Centrica shares are up over 14 per cent in the last 12 months.

The company’s annual report said the pay rise was down to Centrica’s “continued improvements in underlying performance and substantial share price growth.” Carol Arrowsmith, the chairwoman of Centrica’s remuneration committee, said earlier this year that the company needed to retain “high performing executives who can lead this large and complex business”.

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