Chris O’Shea, the Chief Executive of British Gas owner Centrica, has seen a significant increase in his pay package, nearly doubling to £8.2 million, just two months after acknowledging the challenges customers face in paying their energy bills and deeming his salary “impossible to justify.” This substantial rise in compensation comes on the heels of O’Shea’s previous salary of £4.5 million in 2022.
Despite his earlier acknowledgment of the disproportionate nature of his salary, O’Shea accepted bonus payments totaling £7.3 million in 2023, contributing to his overall pay reaching £8.2 million. Centrica’s annual report attributes this surge in compensation to the company’s “continued improvements in underlying performance and substantial share price growth.”
In 2023, British Gas witnessed a remarkable tenfold increase in profits, soaring to £751 million from £75 million the previous year. Additionally, shares in the company experienced significant growth, rising by more than 22% over the course of the last 12 months.
However, this increase in compensation comes amid controversy for British Gas, notably the prepayment meter scandal in February 2023. The scandal exposed how British Gas debt collectors forcibly installed meters in the homes of vulnerable individuals, leading to a temporary sector-wide ban on prepayment meter fittings. Despite the fallout from this controversy, British Gas has yet to resume operations under stricter regulations.
In response to the scandal, Carol Arrowsmith, chair of Centrica’s remuneration committee, disclosed that she had docked 10% of O’Shea’s bonus as a consequence of the controversy surrounding the prepayment meter scandal.
In response to the prepayment meter scandal, Carol Arrowsmith, chair of Centrica’s remuneration committee, highlighted the committee’s consideration of the impact of a national newspaper undercover investigation in February 2023. The investigation revealed the forcible fitting of prepayment meters under court warrants by a third-party contractor working for British Gas. Expressing deep concern over the lack of empathy and respect in some of these cases, Centrica’s group chief executive issued an unreserved apology and promptly commissioned an investigation overseen by external compliance consultants. Subsequently, all warrant activity with the third-party contractor was ceased immediately.
Centrica’s latest annual report revealed a profit of £2.8 billion after tax in 2023, a decrease from £3.3 billion in 2022. This resulted in the company paying £1.1 billion in corporation tax and windfall levies. Apart from British Gas, Centrica owns Bord Gáis, a gas supplier in Ireland, and British Gas Services and Solutions, which provides insurance and service contracts for boilers. Additionally, Centrica owns Spirit Energy, which extracts gas from fields in Morecambe Bay, and Centrica Energy Storage, operator of the Rough storage facility in the North Sea.
Chris O’Shea, the Chief Executive of Centrica, criticized energy regulator Ofgem in the latest annual report, advocating for the elimination of the standing charge on household bills and demanding stricter regulations on the cash reserves held by energy suppliers. O’Shea argued that the standing charge, an annual fixed fee covering network costs, should be eliminated to ensure a fairer distribution of costs, with consumers paying based on their actual consumption. Furthermore, he called for energy companies to be required to hold sufficient capital to absorb costs in the event of company insolvency, rather than passing them on to consumers. O’Shea emphasized the need for accountability, stating that consumers should not bear the financial burden of energy companies’ risks.