British Gas-owner Centrica faces calls for shareholder revolt amid chief exec pay furore
Centrica shareholders will head into the British Gas-owner’s annual meeting (AGM) tomorrow amid a clamour to reject chief exec Iain Conn’s £740,000 pay rise.
Read more: Centrica shares hit 20-year low as it warns of energy price cap hit
Despite a torrid 2018 in which Centrica lost around six per cent of its customers, Conn’s pay soared to £2.42m, up from £1.68m the year before. The financial boost was announced last month, just a week after the firm hiked prices for 15m customers across the UK.
Influential trade union GMB has written to Centrica’s institutional shareholders asking them to block the pay rise, which also comes in the wake of British Gas workers in Leeds and Glasgow being told their sites were under threat of closure as the latest part of a reduction of 4,000 jobs in the company’s customer business by 2020.
Justin Bowden, GMB National Secretary, said the Centrica board was rewarding Conn for a “litany of failure” last year.
“We have 15,000 members in Centrica, who are not being offered 4 per cent pay rises, never mind 44 per cent,” he said. “The resulting loss of confidence since the announcement of Iain Conn’s planned rise runs right through the company from top to bottom.”
Centrica’s board will hope investors are not swayed by a number of shareholder rebellions which have already taken place this year, including at Barclays, medical devices firm Convatec and Standard Chartered. Their cause is unlikely to be helped by the fact shares will open at a near-20 year low of 93p tomorrow.
Read more: British Gas owner gets £700,000 pay rise after hiking bills by 10 per cent
Directors will be buoyed, however, by the support of influential shareholder proxy groups ISS and Glass Lewis, who both recommended voting in favour of the pay hike. Centrica last month said Conn’s performance had been “strong” in the “context of the competitive and regulatory environment,” despite its consumer division falling short of expectations.