The owner of British Gas will hand its chief executive, Chris O’Shea, another salary increase despite a shareholder rebellion over its decision to raise his pay last year while households faced record levels of energy debt.
O’Shea will receive £4.7m for 2025 after Centrica increased his base salary from £855,000 to £1.1m. He will also receive a £1.4m bonus – half in shares, which vest in three years – and £2.2m from the company’s long-term investment plan.
The second consecutive pay increase has come despite nearly 40% of Centrica’s shareholders voting against the board’s pay plans at the energy company’s annual investor meeting in Manchester last year.
O’Shea faced rising criticism after his pay packet ballooned to about £8m in 2023, as many UK homes fell into fuel poverty during the energy crisis and the government was forced to spend billions to cover the surge in energy costs and prevent an industry collapse.
The latest remuneration report said the company would “remain mindful of the mixed shareholder feedback” it received over last year’s pay increase, and would “continue to engage regularly with all of our large shareholders on executive pay decisions”.
It said it now believes it has put in place a remuneration framework “that reflects stakeholder expectations and rewards the long-term success of the group”.
Alongside the annual report, Centrica reported a sharp fall in profits as warm weather allowed British Gas customers to turn down their thermostats, and more households switched to cheaper fixed-price deals. It also suspended share buybacks, causing its shares to slump.
British Gas reported lower profits for 2025 despite modest growth in its customer base after milder than expected weather meant households used less gas and electricity.
Meanwhile, more of its customers are taking advantage of cheaper fixed-rate tariffs to buy their energy, leading to lower revenues for the supplier. About a third of its customers are now on fixed-rate deals, up from a quarter at the end of 2024, the supplier said.
As a result, its adjusted profits fell to £309m for the year, from £364m the year before, even as the number of household customers grew by 1% to almost 8m accounts. Profits across the wider retail business were flat on the previous year at £557m because of higher earnings from its energy services and business solutions divisions.
Centrica lost hundreds of millions of pounds in market value on Thursday after it paused its plan to buy back shares from shareholders after the group’s full-year profits slumped by almost 39%.
Shares in Centrica fell just over 5% after the FTSE 100 company told shareholders it would suspend share buybacks while it channels investment into areas that could deliver more predictable returns in the future.
The company reported adjusted earnings of £1.42bn for 2025, down from £2.3bn the year before.
O’Shea said: “The environment has been challenging, and performance has varied across the business.”
In addition to lower revenues from households, the company’s energy trading earnings were hit by geopolitical volatility on the global energy markets. Outages in the UK’s nuclear reactor fleet, of which Centrica owns a minority stake, also eroded earnings for the year.
In the future, Centrica plans to focus on areas of the energy industry that can deliver “stable and predictable” returns, including government-backed investments in nuclear power, carbon capture and gas storage.
“Pausing the buyback enables us to prioritise investment that creates lasting value for shareholders, while continuing to deliver the reliable, affordable energy that households and businesses need to power economic growth through the transition.” O’Shea said.
Centrica is making significant investments in the new Sizewell C nuclear plant in Suffolk, and hopes to build up to 6GW of advanced nuclear reactors alongside the US-based X-Energy to develop a fleet of advanced modular reactors (AMRs) in the UK. In addition, the company last year bought Europe’s largest gas import terminal at Grain LNG for £1.5bn, and hopes to invest billions in its gas storage facility at Rough.
The investments are perceived as a gamble on Europe’s growing appetite for low-carbon electricity to support the boom in AI datacentres and the need for more secure gas import alternatives after Russia’s full-scale invasion of Ukraine.
“Our strategy is simple,” said O’Shea. “Support the energy transition while making stable and predictable returns. 2025 is a turning point and in 2026 we will build on this momentum.”
O’Shea said the company remained in “very constructive discussions” with the government over the future of the Rough gas storage site, one year after the boss hinted that it may be forced to shut the site unless the government provided financial support to keep the UK’s last remaining large-scale storage site open. It has struggled to turn a profit in recent years.
Centrica reopened the North Sea facility in late 2022 amid Europe’s energy crisis, when rocketing prices helped make Rough financially attractive. But as European gas market prices have cooled, Rough has put financial pressure on the company.
