The chief executive of Centrica, the owner of British Gas, received a 44% pay rise for 2018, despite a difficult year in which the company imposed two bill increases, warned on profits and announced thousands of job cuts.
Iain Conn received a total pay package worth £2.4m last year, up from £1.7m in 2017, according to Centrica’s annual report. His 2018 packet was bolstered by two bonuses, each worth £388,000.
Centrica’s shares plunged to a two-decade low in February when the company warned it would take a £300m hit from the government’s price cap on energy bills.
Britain’s biggest energy supplier has axed 7,700 jobs since 2015 and plans to cut a further 1,500 to 2,000 this year. It is losing about 90,000 customers a month, but its 12 million-strong customer base make it the UK’s biggest energy supplier by some distance.
Last year, British Gas introduced two bill increases of 3.8% and 5.5%, bringing the average annual charge for a dual fuel customer to more than £1,200.
ShareAction, which campaigns for improved social and environmental behaviour from companies, said Conn’s pay would “rightly awaken much anger”. A spokesperson said: “Centrica provides a basic utility to millions of people – it should pay in line with the expectations of the customers it serves.”
Centrica is likely to face questions from shareholders about its financial and share price performance at its annual meeting in London on 13 May. Last year, the board came under fire due to the collapse of the company’s share price.
Conn’s basic salary went up to £940,000 last year from £936,000 in 2017, while his bonus awards under a long-term bonus scheme were less than the previous year, falling to £387,000 from £431,000. His benefits and pension went up slightly.
Centrica’s chief executive is paid 72 times as much as an employee who is in the lower 25% of the company’s pay range, such as a smart-energy expert, who gets £33,718. Conn is paid 59 times as much as someone in the middle of the salary range, such as a servicing engineer on £41,239, and 44 times as much as a technical engineer, who earns £55,107.
Scott Wheway, who chairs Centrica’s pay committee, said 2018 had been “another challenging year, with volatile commodity prices, strong competitive pressures and significant political and regulatory intervention in our markets”.
The company’s profit target was not met but its cashflow target was slightly exceeded, he said.
Overall profits at Centrica were up 12% to £1.4bn last year, although profits at its home energy division fell 18% to £668m.
