In This Article:
The chief of British Gas is to receive a 29pc pay boost that will take his salary above £1m as households brace for higher bills.
Chris O’Shea’s basic salary increase, which comes into force on April 1, will arrive on the same day that energy price rises take average consumer energy bills to £1,849 a year.
Centrica, which owns British Gas, said Mr O’Shea was underpaid on his current salary of £855,000 compared with other FTSE 100 chief executives. He will now be paid £1.1m to take into account the company’s growth and complexity.
Despite the salary boost, his total pay packet has nearly halved from last year after a boom in energy prices slowed.
Including annual and long-term bonuses, he will take home £4.3m – significantly less than the £8.2m he was awarded in 2023 when Centrica’s share price soared in the wake of the energy crisis, but similar to the £4.5m awarded the year before.
The pay awards emerged in Centrica’s annual report, showing profits of £1.6bn for last year, and a market capitalisation of £6.8bn compared with £1.9bn in 2020 when Mr O’Shea was appointed.
In a foreword to the report, Mr O’Shea said a chief executive’s key task was to create value for its shareholders rather than meet environmental or diversity targets.
“Too many companies can appear to lose focus on the job at hand with the ever-increasing environment, social and governance (ESG) requirements... I am focused on creating value every single day of the year,” he said.
British Gas supplies 7.5m residential energy customers with gas, electricity or both – adding up to just over 12m accounts, plus 552,000 business customers.
Earlier this year it lost its crown as Britain’s largest household energy supplier after being overtaken by Octopus Energy.
Octopus serves 12.9m household accounts, according to industry analyst Cornwall Insight – 0.6pc more than British Gas, which had held the top spot since it was privatised by Margaret Thatcher in 1986.
However, Centrica also owns North Sea oil and gas fields, a stake in Britain’s nuclear plants and the country’s biggest gas storage site.
Carol Arrowsmith, chair of Centrica’s remuneration committee. said in her pay report: “When Chris O’Shea was appointed group chief executive on April 14 2020, the Company was ranked 154th in the FTSE with a market capitalisation of £1.9bn.
“The previous CEO’s salary was £957,500, which was 24pc higher than Chris’s starting salary of £775,000. Our normal approach is to pay newly promoted executives below the market median and increase their pay subject to their development and personal performance in role.”