British Gas owner Centrica PLC (LSE:CNA) almost doubled its chief executive's pay packet last year, against a backdrop of continued high energy bills that have squeezed household finances across the UK.
Chris O’Shea saw his pay rise from £4.5 million to £8.2 million, the energy firm's annual report said, including a base salary, annual bonus and long-term rewards.
Driven largely by bonuses linked to Centrica's share performance, the increase comes after British Gas enjoyed a tenfold increase in profit to £750 million by charging people more in bills under allowances in Ofgem’s energy price.
Centrica remuneration committee chair Carol Arrowsmith said the pay was based on previously agreed terms and pointed out the firm needed to attract high-performing leaders.
“The structure of the package was approved by our shareholders, and it is consistent with similar companies,” she added.
O’Shea himself said “you can't justify a salary of that size” while households continue to struggle with energy bills in the UK during an interview in January.
"As Mr O'Shea himself admitted a few weeks ago, it's not really credible to argue the work that he does is at all proportionate to a pay award even half this size, nor is it necessary to the success of the company," High Pay Centre executive director Luke Hildyard commented.
"It's a major governance failure and by extension a policy failure."