Centrica, the FTSE 100 conglomerate that owns British Gas, has reported a significant reduction in its chief executive's remuneration for the latest financial year.
Chris O'Shea, who has helmed the energy giant since 2020, received £4.3m over the 12-month period, a sharp decrease from the £8.2m he earned the previous year, as reported by .
In 2022, O'Shea's compensation totalled £4.49m.
READ MORE: {}
The breakdown of his most recent earnings includes an £845,000 base salary, £1.4m from the annual incentive plan, and £2m from the long-term incentive plan.
Comparatively, last year's remuneration package was comprised of an £810,000 salary, a £1.4m annual bonus, £5.9m in long-term incentives, alongside pension and benefits.
Despite this pay cut, the owner of British Gas has stated that O'Shea's "remuneration is no longer sufficiently aligned with our peers, and his performance and experience warrants positioning his pay between the median and upper quartile of the FTSE 100."
Consequently, Centrica has announced it will raise the CEO's salary to £1.1m from £855,000 starting 1 April.
Additionally, the company has confirmed an increase in O'Shea's maximum RSP (Restricted Share Plan) award from 150% of his salary to 200%.
British Gas owner backs salary hike
Most Read
Backing the decision for the salary hike, the group commented: "The committee considered whether the increase should be phased over multiple years."
The committee has made a decisive move regarding the CEO's remuneration, as stated in their recent announcement: "However, considering the CEO's track record and experience as well as the current positioning versus the market, the committee determined that it would be inappropriate to continue to pay him below market competitive rates and therefore decided to implement a one-off adjustment."
They also justified this decision by referring to past restraint: "This also reflects the prudent decisions taken over the past four years, which restrained the committee from applying phased relative increases up to this point."
Centrica's annual report arrives on the heels of British Gas's parent company surpassing earnings forecasts for its latest financial year and announcing an increase in its dividend.
The energy giant reported EBITDA of £2.3bn for the year ending 31 December, a decrease from the previous year's £3.5bn but significantly exceeding analyst predictions of £1.6bn.
Adjusted earnings per share were reported at 19p, surpassing the anticipated 18.62p.
In addition to these strong financial results, Centrica revealed plans to raise its dividend by 13% to 4.5p and to boost its ongoing share buyback programme by £500m.
The company, in its annual report, expressed confidence in its business model and its advantageous position for capitalising on the shift towards net zero: "Our performance in 2024 demonstrates that our business model is resilient in different market conditions, and we are well placed to benefit from the transition to net zero."