Pay Madness

 

Raving Madness
Caius Gabriel Cibber (1630-1700)
Photo Credit: Bethlem Museum of the Mind [CC BY-NC]

The boss of British Gas owner Centrica has said it is "impossible to justify" his £4.5m pay packet.

Chris O'Shea said there was "no point" trying to justify his huge salary when millions of his customers were struggling to pay their heating bills due to soaring energy costs.

 O'Shea, who has been chief executive of Centrica since 2020, received bonuses totalling £3.7m in 2022 on top of his £790,000 salary. The bonuses were paid out as Centrica made record profits of £3.3bn after oil and gas prices jumped following Russia's invasion of Ukraine.

"You can't justify a salary of that size," O'Shea told the BBC yesterday. "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."...

Asked for the second time by the BBC Breakfast host Charlie Stayt to justify accepting the bonus now, he said: "You can't, because it's a huge amount of money to anybody looking at this."

He gestured towards Stayt and co-presenter Naga Munchetty and added: "I suppose for the same reason, I mean, if you look, the average salary in the UK is around £30,000. It's not for me to set my own pay. It's not for you to set your own pay. But you've got to recognise that when you've got people who are struggling, and I look at my mum who's on the basic state pension, it's just impossible to justify, so there's no point in trying to do that...

Andrew Speke, spokesperson for the High Pay Centre, a thinktank focused on pay, corporate governance and responsible business, said O'Shea's inability to justify his own income was a clear sign that executive pay across the country was out of control.

"It's rare for a CEO to admit their pay is too high, particularly when many FTSE CEOs are complaining that their pay is too low," Speke said. "Nevertheless one would expect someone paid such a huge sum to show greater leadership and responsibility and actively challenge the pay setting process, rather than saying he doesn't deserve it, before shrugging and accepting it anyway.

"This is just one example of an executive pay model across corporate Britain, where how much an executive is paid is rarely aligned with how well their company has served its customers and wider society

"Mandating workers on boards would be one step towards ending this culture of rewarding failure."

(Rupert Neate, The Guardian, 2024)

Didn't the consumer group Which name British Gas as the worst energy supplier for customer service? 

 The top salary for an experienced consultant working in the NHS is around £126,000. The Prime Minister receives £164,00. The TV presenter Naga Munchetty gets paid between £335,000 - £339,000 a year. The boss of  Centrica - £4.5 million. What kind of madness is this?