British Gas: Centrica chief’s pay swells to more than £8m

The chief executive of Centrica, the owner of British Gas, saw his pay swell to more than £8m in 2023, it has been revealed.

Chris O’Shea, who has been CEO of the FTSE 100 company since 2020, took home £8.23m, up from £4.49m in 2022.

The package consists of £810,000 in salary, a £1.4m annual bonus and £5.9m in long-term bonus, and some pension and benefits.

In its annual report, Centrica said the increase was due to “continued improvements in underlying performance and substantial share price growth”.

It added that since his appointment, Mr O’Shea has “helped create significant value for shareholders with Centrica’s TSR outperforming the FTSE100”.

The group also said that his cumulative single figure of total remuneration over the same period is “broadly in line with the median cumulative single figure for CEOs in the FTSE 100”.

Its remuneration committee added that it believes that the figure “appropriately reflects the performance of both Chris O’Shea and the business over the relevant period”.

Centrica also said that the figure is “likely” to be lower in the next two years to reflect outcomes of long-term incentive awards.

From April 1, 2024, Mr O’Shea’s base salary will increase by 4.9 per cent to £855,000, below the rate of the wider workforce of 6 per cent.

The annual report comes after Mr O’Shea said there was “no point” trying to justify his 2022 pay packet.

Speaking to BBC Breakfast, the CEO said: “You can’t justify a salary of that size.

“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.”

In Centrica’s annual report, remuneration committee chair Carol Arrowsmith said: “Centrica’s performance and the executive team’s leadership in challenging conditions are reflected in the remuneration outcomes and the decisions the committee has made in 2023.

“It is also consistent with the objectives of our remuneration policy to deliver remuneration that attracts and retains high calibre executives in a competitive global business environment in return for the achievement of our strategic objectives and the delivery of sustainable long-term shareholder value and returns.”

Centrica added that the remuneration committee will conduct a “comprehensive review” of its policy ahead of a shareholder vote at its 2025 AGM.

In February, Centrica issued a “strong 2023 financial result” as the company’s retail division saw a sharp jump in profits for the year.

It revealed its operating profit for 2023 came in at £2.8bn, down on 2022’s figure of £3.3bn.

British Gas Energy saw profits skyrocket from £72m to £751m, slightly exceeding analyst expectations of £747m.

This offset a decline in profit from the group’s other businesses, namely Centrica Energy, which deals in energy trading and asset management, where profits almost halved from £1.4bn in 2022 to £774m.

Profits at Centrica’s nuclear arm dipped, falling from £724m to £536m.