British Gas owner facing shareholder showdown over chief’s £4.5m bumper pay
British Gas owner Centrica has announced that the operating profits for its retail arm will be “significantly higher than in previous years,” as it seeks to win a shareholder showdown at its AGM today.
The FTSE 100 firm has posted a bullish trading update ahead of a heated series of votes with shareholders over executive pay, where bosses could face resistance from shareholders over chief executive Chris O’Shea’s proposed £4.5m pay packet.
The energy giant expects a hike in profits due to reductions in debt-related costs rather than windfall trading, which powered its record earnings last year.
Watchdog Ofgem’s provides an allowance in the price cap to account for debt suppliers cannot recover from energy bills and has to be written off – with customers struggling during the energy crisis.
It also predicts full-year group adjusted earnings per share to come near the top-end of the 16.5 pence- 24.7 pence range it established earlier this year.
The company’s latest financial report recommends £4.5m in take home pay for chief executive Chris O’Shea – a five-fold hike in his salary.
Centrica expects to face pushback from some big players in the industry at its AGM in Leeds, with asset manager Abrdn expected to vote against the group’s pay recommendations for top management.
This will be put to a shareholder vote – with Centrica expected to win all the motions set out at its AGM, despite the controversy.
The bumper handout to executives follows Centrica unveiling record £3.3bn earnings last year, powered by soaring oil and gas prices after Russia’s invasion of Ukraine.
Alongside the headline figures, the energy giant also revealed that its performance over the first five months of the year across its portfolio has been strong overall – including in energy marketing, energy trading and infrastructure.
It confirmed that volumes from gas production, nuclear and gas storage assets has been robust, helping to offset the impact of lower wholesale commodity prices.
As for headwinds, Centrica pointed to the impact of warmer weather on commodity prices, the economic downturn on demand and potential future government policy changes to the investment climate – which could all effect its full year results.
The company’s interim results are scheduled for next month, at which time Centrica intends to provide a fresh update on its strategy and capital framework.
Shares in the company are down 1.1 per cent in this morning’s trading on the London Stock Exchange despite the bullish update.