The boss of British Gas owner Centrica has been urged to waive his £1.6m bonus, after the company’s “monster” record profits of £3.3bn sparked outrage among campaigners.
Chief executive Chris O’Shea refused to discuss his bonus, as he defended his company tripling its profits amid spiralling energy prices which have hammered families during the cost of living crisis.
The company chief said on Thursday that was is “too early to have a conversation” about his potential bumper payout despite pressure from campaigners to reject it.
Mr O’Shea is due to receive an annual salary of £794,000 for the past year, following a 2.5 per cent increase. He could also be eligible for an almost £1.6m bonus if Centrica has matched the firm’s long-term targets.
Simon Francis, campaigner at the End Fuel Poverty Coalition, called on Mr O’Shea to “look at his conscience” – saying it would “not sit right that someone would personally profit so much from the misery of the energy crisis”.
Mr Francis added: “Given the failings in British Gas exposed in recent months … it cannot be said to have met its social responsibilities in full and that should cause bosses to consider if it is appropriate to take bonuses this year.”
Ruth London, co-founder of Fuel Poverty Action, said: “Chris O’Shea should certainly lose his bonus, which is more than most people can expect to earn in a lifetime.”
She added: “British Gas’s grotesque profits come from the money people need to keep warm and feed their children. Every year, thousands die because they cannot heat their homes.”
Centrica’s earnings haul for last year have stoked anger over a run of massive profits notched up in the sector and reinforced calls from opposition parties, unions and environmental campaigners for greater windfall taxes.
Shadow climate secretary Ed Miliband hit out at the government as he promised that Labour would introduce a “proper” windfall tax on energy companies.
“It cannot be right that, as oil and gas giants rake in the windfalls of war, Rishi Sunak’s Conservatives refuse to implement a proper windfall tax that would make them pay their fair share,” he tweeted.
Trades Union Congress (TUC) general secretary Paul Nowak said that the energy market in Britain is broken, saying “firms like Centrica are raking in monster profits”, arguing that privatisation has proved “a disaster for hard-pressed households” despite boosting shareholders.
Sana Yusuf, climate campaigner at Friends of the Earth, also called on the government to take tougher action on a windfall tax, saying it would help fund “the investment in insulation and homegrown renewables needed to bring down bills and cut emissions”.
But Mr O’Shea said the profits would help the company lower bills and invest in renewable energy. “Profits at Centrica have a purpose, and that purpose is net zero, that purpose is helping customers having lower bills going forward,” he also told reporters on a call.
Asked about bonuses, Mr O’Shea added: “On the bonus, we’ve been a bit more efficient this year, and we’re a bit earlier in the process. It’s a bit early for us to say – the annual report will be published in March and it will have everything that you need.”
Mr O’Shea was offered a £1.1m bonus for the previous financial year but turned it down.
The figures also come amid a furore over British Gas’s use of debt collection agencies to install costly pre-payment meters by force in the homes of vulnerable cash-strapped customers.
The scandal sparked an investigation by regulator Ofgem and has seen the firm halt the forced use of pre-payment meters. Gordon Brown told The Independent last week that Ofgem chief Jonathan Brearley should quit for failing to prevent the scandal.
A new Savanta ComRes poll for The Independent has found that the majority of the public agree. Some 57 per cent said the Ofgem chief executive should stand down, while only said he should stay on.
The survey also found that 47 per cent of voters want energy firms fined and forced to give compensation if they are found to have forced prepayment meters on customers.
Centrica’s record profit revealed on Thursday overwhelmingly came from nuclear power plants and its energy trading arms. Profits at British Gas Energy, which serves 7.5 million households, dropped by 39 per cent to £72m.
The company also raked in £1.4bn of profit from its trading arm, which speculates on energy prices, a stunning 1,900 per cent increase from the year before.
Dr George Dibb, from the IPPR think tank, said these profits were being transferred directly to shareholders via buybacks and dividends, and transferred away from bill-payers during a cost of living crisis. “It is time to introduce a tax on share buybacks and use those revenues to support public services,” he suggested.
