British Gas chief's pay package jumps to £8.2m

Centrica, the parent company of British Gas, reported that its CEO Chris O'Shea's pay increased to £8.2 million in 2023, nearly double from £4.5 million in 2022.

This pay package includes a base salary of £810,000, a £1.4 million bonus, and £5.9 million in long-term incentives. O'Shea himself has commented that his pay is "impossible to justify."

The significant rise in his remuneration is largely attributed to the substantial increase in the company's share price, contributing to a steep hike in his long-term bonus.

Centrica's leadership defends the compensation, emphasizing the necessity of competitive pay to attract and retain top executives for a company of its size and complexity. Shareholders have approved the pay structure, deemed consistent with industry standards.

In 2023, British Gas's profits surged to £750 million, a tenfold increase, following a decision by the regulatory body Ofgem which allowed it to retain a larger profit margin to recover losses post the Ukraine conflict. Despite a fall in oil and gas prices, Centrica's profits remained high at £2.8 billion.

O'Shea, acknowledging his high earnings amidst rising energy costs for consumers, admitted the difficulty in justifying his pay scale. Energy bills in the UK are set to decrease under a new Ofgem price cap, reducing the typical annual energy bill to its lowest in two years, although prices remain higher than pre-pandemic levels. The price cap will impact 29 million households but varies by region, with different rules applying in Northern Ireland.