The boss of the British Gas owner, Centrica, has said it is “impossible to justify” his £4.5m pay packet.
Chris O’Shea said there was “no point” trying to justify his huge pay packet when millions of his customers were struggling to pay their heating bills because of soaring energy costs.
O’Shea, who has been the chief executive of Centrica since 2020, received bonuses totalling £3.7m in 2022 on top of his £790,000 salary. The bonuses were paid out as Centrica made record profits of £3.3bn after oil and gas prices jumped after Russia’s invasion of Ukraine.
“You can’t justify a salary of that size,” O’Shea told BBC Breakfast on Friday. “It’s a huge amount of money; I am incredibly fortunate. I don’t set my own pay; that’s set by our remuneration committee.”
The comments come as millions of British Gas customers struggle to cover their monthly gas and electricity payments. The typical annual household energy bill shot up from about £1,000 in April 2021 to £2,500 in October 2022, when the government intervened with its energy price guarantee. It remains at just below £2,000, and UK domestic energy customers owe almost £3bn between them on their bills.
O’Shea said the £3.7m bonus was “the first bonus I’ve taken in my time at Centrica; for a number of years, I’ve given up bonuses because of hardships that customers were facing”.
Asked for the second time by the BBC Breakfast host Charlie Stayt to justify accepting the bonus now, he said: “You can’t, because it’s a huge amount of money to anybody looking at this.”
He gestured towards Stayt and the co-presenter Naga Munchetty, and added: “I suppose for the same reason, I mean, if you look, the average salary in the UK is around £30,000. All of us sitting here on this sofa will make substantially more than £30,000. It’s not for me to set my own pay. It’s not for you to set your own pay.
“But you’ve got to recognise that when you’ve got people who are struggling, and I look at my mum who’s on the basic state pension, it’s just impossible to justify, so there’s no point in trying to do that.”
British Gas is facing an investigation by the regulator Ofgem, launched a year ago, looking into its use of debt collectors to force-fit gas meters in the homes of vulnerable customers, after an investigation by the Times.
Last year, O’Shea told MPs that 300 customers had written to the energy supplier since the Times report, saying they had been moved on to prepayment meters incorrectly. “We’re looking into every one of those cases. If that’s the case, we’ll reverse it; we’ll make it right,” he said.
after newsletter promotion
The consumer group Which? on Friday named British Gas as “the worst energy supplier for customer service”. O’Shea said British Gas had set aside £100m for a hardship fund, which had helped about 21,000 customers since 2021.
Andrew Speke, a spokesperson for the High Pay Centre, a thinktank focused on pay, corporate governance and responsible business, said O’Shea’s inability to justify his own income was a clear sign that executive pay across the country was out of control.
“It’s rare for a CEO to admit their pay is too high, particularly when many FTSE CEOs are complaining that their pay is too low,” Speke said. “Nevertheless, one would expect someone paid such a huge sum to show greater leadership and responsibility and actively challenge the pay-setting process rather than saying he doesn’t deserve it, before shrugging and accepting it anyway.
“This is just one example of an executive pay model across corporate Britain, where how much an executive is paid is rarely aligned with how well their company has served its customers and wider society. Mandating workers on boards would be one step towards ending this culture of rewarding failure.”
