The Fife boss of British Gas owner Centrica has been handed a £4.5 million pay package, a five-fold increase.
The raise for the firm’s controversial chief executive Chris O’Shea comes after the business saw its profits soar last year.
Mr O’Shea, born in Kirkcaldy and raised in Glenrothes, is paid an annual salary of almost £800,000.
Like most FTSE100 chief executives, he also receives a bonus related to performance.
Of his seven-figure pay package, £711,000 will be paid straight away, while the rest is tied up in Centrica shares for a few years, the business has revealed..
It will be the first time Mr O’Shea has been paid a bonus since taking the top job at Centrica in 2020.
A year ago he waived his right to a bonus as customers were struggling to pay their energy bills. That left his total remuneration at £875,000.
This meant he was the third worst-paid chief executive in the FTSE 100.
Eyebrows raised at Fifer’s five-fold raise
Nevertheless, the move to accept the extra millions this year is likely to raise eyebrows.
The massive profits Centrica built up last year came off the back of an energy crisis which was largely caused by Russia’s attack on Ukraine.
Secondly, British Gas – Centrica’s most famous subsidiary – was thrust into the headlines earlier this year amid allegations that a subcontractor had been forcing its way into the homes of vulnerable people to switch them to prepayment meters.
Mr O’Shea was forced to apologise after the issue was revealed by The Times.
Mr O’Shea said he was “really, really sorry”.
He told Sky News: “We’ve clearly got it wrong here and we are going to fix that.”
He said contractor Arvato “let us down” but ultimately accepted he was “accountable”.
The scandal sparked an urgent inquiry by regulator Ofgem and has seen Centrica banned from force-fitting pre-payment meters.
The company is still investigating what might have gone wrong, and how widespread the problems are.
Last year Mr O’Shea made headlines due to his views on fracking.
The UK government placed a moratorium on fracking in 2019, amid fierce local opposition and fears of earthquakes.
However, Mr O’Shea said there needed to be an “informed debate” about it.
Mr O’Shea told BBC Radio 5Live’s Big Green Money show: “The key question is, do we want to source our gas from overseas?
“Or do we want to have more gas domestically? And shale is certainly worth exploring.”
‘Performance justified a bonus’
In its annual report, Centrica argued that it needed to pay bonuses to “retain leaders”.
Board member Carol Arrowsmith wrote: “In my letter to shareholders last year, I explained that Chris O’Shea had elected not to accept his 2021 annual bonus payment due to the hardships faced by our customers.
“This decision was made after Chris had not received a bonus payment for the previous two financial years.
“I made it clear in my letter that if performance in 2022 justified a bonus, It was our intention to pay that bonus.
“We cannot expect to attract and retain leaders in the future if we do not meet our commitment to recognise and reward the performance and talent of our people.”
She added: “Like most public companies we hire our senior executives on employment contracts that have a significant proportion of pay which is performance-related.
“We set stretching targets linked to financial success and other important factors. If we meet or exceed these targets, then this is reflected in an executive’s performance-related pay.”
Who is Centrica boss Chris O’Shea?
He was born in Kirkcaldy in October 1973. He left Fife at the age of 11, moving to Glasgow after a turbulent time for his parents’ business.
In an interview with The Times last year, he said: “My whole life was uprooted and the one bit that was stable was a family friend who was also the accountant.”
After not being accepted into Oxford to study law, he studied accounting at Glasgow University.
He started out as a chartered accountant and worked for companies including Ernst & Young and Shell. Mr O’Shea joined Centrica in 2018.
After roles as chief financial officer and interim chief executive, he took up his present position in April 2020.
The 49-year-old is married with three children and now lives in Reading.
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