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Announced on the BBC website and “allowed” by Ofgen to pay back debt.
https://www.bbc.co.uk/news/business-68303647
Discus(t)s….
Chris O'Shea, chief executive of Centrica, said the company had "done a lot we can be proud of in 2023", adding it had paid more than £1bn in tax.
The boss of British Gas owner Centrica has told the BBC his pay last year of £4.5m is "impossible to justify".
Chris O'Shea described the package of salary, bonus and shares as a huge amount of money and said he was incredibly fortunate.
While he pointed out that he did not set his pay, he admitted that - with customers struggling with bills - "you can't justify a salary of that size".
He said his mother was on the basic state pension
This is a horrible company with a horrible CEO.
Isn't this more down to their write downs in the previous year skewing the figures dramatically?
His salary is no different to any other FTSE 100 company boss
Yeah, cause they're all saints so he must be too 🙄
"His salary is no different to any other FTSE 100 company boss"
literally one of the biggest issues in capitalism today is the disparity between worker pay and board pay. It couldn't be more pertinent.
Did you read?
Fine, they’re a big company.
But they made 750 million off 7.5 million customers.
£100 profit per customer, over a year. Doesn’t seem too bad.
The previous year’s figures when they were compelled to take on customers from other failed companies have distorted things, especially the year on year percentages.
I’m all for complaining about profiteering, but maybe not every time as a reflex, without you know, reading.
CEO pay vs other staff pay is a separate thing
I’m all for complaining about profiteering, but maybe not every time as a reflex, without you know, reading.
Sorry but I'm not the best person to reason with on this, I'd be upset at the thought of an energy company making a 1% profit to be honest.
Even land of the free USA has a largely publicly owned energy system.
This is a horrible company with a horrible CEO.
People in my team know him. He's a very nice chap. Or do you know him and think differently?
I've met a few energy/utility CEOs and hosted them for a few days. They were all pleasant company, very bright and personable. If you met them in a pub you'd never think they were CEOs.
It's the system that's at issue.
EDIT
Even land of the free USA has a largely publicly owned energy system.
I don't believe this to be true (off the top of my head, Eversource, PG&E and National Grid are all publicly traded, i.e. mainly owned by pension funds at a guess). I do think that public ownership of monopoly services is possibly a better way that what we have in the UK.
with a horrible CEO.
Exactly which bit of your quote do you think makes him horrible?
The fact that he is honest about his pay?
The fact he realises he is very well paid and fortunate.
The fact that his mum isn't from old money?
I'm sorry, I'm just not seeing it....
His salary is no different to any other FTSE 100 company boss
And there is the issue
Exactly which bit of your quote do you think makes him horrible?
Boasting about his massive salary and saying he's lucky but still takes it anyway. Tries to defend himself by saying his mother is on basic state pension - either he's paying her to live well and therefore mentioning that is irrelevant and attempting to sound down to earth, or he isn't helping her out and he's therefore a dick. In the same interview he called out BBC presenters for also being very well paid when they aren't even in the same league as him (and how does pointing that out make it any better?).
Why not donate the remainder of his pay to charity if he feels he can't justify it?
These elite are all the same. I once did some building work for Viscount Allendale and he often made a point of mentioning that "we aren't as well off as people think, you know" whilst we installed his 60 grand kitchen beneath his priceless 14ft wide paintings. The only difference is theirs is inherited wealth, the British Gas CEO's is grifted wealth.
Water and sewage are public in Scotland and private in England. As far as I can see the costs are in the same ballpark.
https://www.moneysavingexpert.com/news/2024/02/water-bills-to-rise-england-and-wales
As for Chief Executive trough dipping? Our water regulator boss has just quit after the auditor questioned spending.
https://www.insider.co.uk/news/water-regulator-boss-quits-after-31722533
The boss of British Gas owner Centrica has told the BBC his pay last year of £4.5m is “impossible to justify”.
Did you actually watch that interview, or just take a quote of a quote from it?
How much do you earn? Can you justify it?
He was being remarkably humble when he said it, in effect just very lucky to have had the skills and opportunities to end up in that position.
I agree executive pay is ludicrous, although the thing I can't quite comprehend is how failing CEOs just seem to move sideways. Surely the solution to finding better (and cheaper) CEOs is to more quickly promote the capable people through management/board positions so you have a bigger talent pool.
Although let's be honest, oil and gas "worker" pay is pretty good too 🤣
Are their bills 910% higher than all other energy suppliers? I doubt it.
Not defending energy companies but it makes a great headline for Twitter baiting.
I used to work for Centrica / BG and it was the best company I have ever worked for.
They might be lovely to work for - I found the experience of being a customer rather wanting. After leaving I found the experience of being an ex-customer extremely wanting. More than a year after closing my account with them I suddenly started being hit with demands for payments. I'd been in credit when I closed the account. I queried it and was told to ignore it. Demands continued. I queried it again - they told me it was an overdue amount for gas... for a property that didn't have a gas supply. I pointed that out - they said it was an overdue amount for electricity - for a property that they were't the electricity supplier. I pointed that out.... this went through several iterations. Non of which involved providing a bill or meter readings that related to the sum they were demanding.
Every email they sent in reply to my request for a bill apologiesed, told me how much they valued me as a customer (which I'm not) and referred to the requested bill attached to email. Each time there was no bill attached to the email. Every step in this process to 4-6 weeks.
A proper shit show. 'Supplier of last resort' apparently - I think they've managed to find a rungs on the ladder below that.
Airvent - your recollection of the BBC interview and mine are quite different.
He acknowledged that his pay was high, but that he didn’t set his own pay level. The BBC presenters also kept pushing him as to whether he should get paid so much. All he did was point out that they are paid substantially more than most and would they like to talk about their pay.
I understood the reference to his Mum was that he had an average background but had done well for himself- good on him. Whether he supports his mum financially or not is no one else’s business
Dont be jealous / bitter of people you perceive to be rich life is too short .
We had a new boiler installed a few week ago. The installer (who I know) told me that all the BG service engineers had been paid three years' worth of bonuses in advance because BG needed to get rid of some cash. This could well extend to the whole organisation, and would reduce their reported profit.
Even after this creative accountancy (and I would assume similar in other areas) they still reported an obscene profit.
It's about £100 per household, isn't it?
Water and sewage are public in Scotland and private in England. As far as I can see the costs are in the same ballpark.
sort of yes - but no one takes profits out, we do not get the same leakage and sewerage dumping to the same extent. Its a publicly run service for public good.
It’s about £100 per household, isn’t it?
Averaged. Up until July ' 23 (this accounting period) people with pre-pay meters were paying more for their electricity, so you can almost guarantee that some of the poorest folks were paying more in profits as a percentage of thier (low) income
Before I worried about CEO pay I’d tackle the problem of the poor paying more for a unit of energy than the rich
Tillydog - what a load of twiddle. I used to work in finance for Centrica . There are much simpler , easier ways to ‘get rid’ of money if you need to.
Some of their engineers do earn big sums of money, as in way + £100k but they work long hours for it.
The reason I left Centrica in the end was because accountancy was done to maximise the shareholder position each month. The very poorest customers paid more than avg Joe (that was a roos the industry not just Centrica) and yes there was a massive disconnect between exec pay and those grafting beneath them.
But as a company to work for they were brilliant and good on anyone who grafts hard enough to get to a position where they are earning that level of pay
A couple of thoughts on the CEO pay bit and why he gets it/does he deserve it. This is roughly ripped off a presentation I saw years back
Position in Company………Salary
First Rung…….…………………Minimum Wage
Low Grades………….…………Market rate + incentives (free parking, tea & coffee etc)
Skill Grades………….…………Market rate + incentives (training and memberships)
Management………………….Market rate + incentives (quarterly/annual bonus)
CEO & Board…………………..Market rate + incentives (bonus & shares)
The pay rates which people can argue are unfair and too low/high for any given grade are really not under that much control of the individual companies. If all the companies acted together then they could adjust the market value but I think the unions would get upset if they dropped the wages for no reason other than ‘market adjustment’ and at the board level it is difficult to get all the turkeys to vote for Christmas unanimously at the same time.
Don’t blame the system, blame mankind and evolutionary forces for creating the system?
Position in Company………Qualifications
First Rung…….…………………Minimum Requirements met
Low Grades………….…………Still here after a year
Skill Grades………….…………Have specific valuable skills
Management….………………Can plan, agree & report for company
Board……………………….……..Can plan, agree, decide and direct the company
CEO………………………………….Can plan, project the plans, get agreement & take the heat
Lots of peop[le ‘fear’ the CEO role as it is very obvious when you are failing but once you have overcome that fear you discover it is much the same as any other job so are happy to apply for CEO to other places, hence the CEO merry-go-round.
It’s about £100 per household, isn’t it?
So about 5% profit if you take the energy price cap as the average household usage.
Doesn't seem unreasonable.
A consultancy I did a years work for wouldn't even bid for jobs unless profit was projected at 40% or more.
People sometimes struggle with the concept of scale when it comes to money made vs profit. Supermarkets vs Other grocery shops are a great example. The supermarkets are terrible for the massive profits they make, and yet, from Quora - "Generally, supermarket profit margins can range from 1% to 5%. However, certain high-volume products such as fresh produce may have lower margins, while specialty or premium products may have higher margins."
The little shops actually make a far higher profit margin per item sold but lose out on the economies of scale but for some reason a supermarket making less than 1% profit on fresh tomatoes is a bastard while Jim the Greengrocer making 10 times as much profit is a lovely chap just struggling by.
BG make an average of 27p per day per customer which isn't terrible but use maths to factor in the number of customers and it is almost criminal
I used to work for Centrica / BG and it was the best company I have ever worked for.
I used to work for them and they were a bunch of arseholes! I was at the bottom of the social and financial pile, but I feel like the way a company treats its grunts is illustrative of its ethos generally.
Any salary above minimum wage was considered a 'bonus' and deducted if you fell out of line. Two days off sick in the same quarter? Straight back down to minimum wage - technically legal because they weren't docking your pay, just choosing not to award you a bonus. Clock in at 9:05 a couple of times? No you can't make it up by staying late. Minimum wage for you, sunshine, better cancel that night out on Friday. They screwed every penny out of the kids at the bottom.
Arseholes. Worst company I've worked for.
Even after this creative accountancy (and I would assume similar in other areas) they still reported an obscene profit.
The usual reason for needing to dispose of cash (creative accountancy as you put it) is because if you're profitable and have cash in the bank then you're an easy target to be taken over. But the usual way to dispose of that cash is
1st - shareholder dividends, added bonus that it boosts the share price making a takeover harder.
2nd - executive pay, bonuses, etc
3rd - acquisitions and R&D (the best from a long term business point of view, but the slowest to achieve and require ongoing commitments so not ideal if it's a windfall)
1st – shareholder dividends, added bonus that it boosts the share price making a takeover harder
Their reference to the creative accounting seems more about suppressing the profits in an attempt to not look so greedy vs your comments about disposing of cash.
In terms of dividends I thought buybacks were gaining popularity since it also boosts share prices and also avoids setting expectations about next years dividend being as good and hence a drop in share price when it aint.
it's not "910% profit" it a 910% increase in profit, which is very different.
If last year I made £1 profit, and this year I make £10 profit, that's a 900% increase.
Their reference to the creative accounting seems more about suppressing the profits in an attempt to not look so greedy vs your comments about disposing of cash.
In terms of dividends I thought buybacks were gaining popularity since it also boosts share prices and also avoids setting expectations about next years dividend being as good and hence a drop in share price when it aint.
6 Vs 1/2 doz, the profit is cash sat in the bank that you need to spend. But yes, buybacks would be better than a straightforward
dividend I guess.
it’s not “910% profit” it a 910% increase in profit, which is very different.
If last year I made £1 profit, and this year I make £10 profit, that’s a 900% increase.
Is definitely the way to be looking at it.
Company makes 9x more profit than it did during the worst trading period in recent history which bankrupted several of it's competitors.
I think gas and electric should be like tax allowance, we all get a comined lets say 10,000 kw at a discounted afordable for all price , after that if you choose to have a swimming pool or heated floor in your shed or are just wastefull because you can afford to not care you then pay for the kw above 10,000 at a higher rate.
I think gas and electric should be like tax allowance, we all get a comined lets say 10,000 kw at a discounted afordable for all price , after that if you choose to have a swimming pool or heated floor in your shed or are just wastefull because you can afford to not care you then pay for the kw above 10,000 at a higher rate.
Part of the problem is housing stock, it'd be fine for the average STW dwelling aspirational former farmhouse on the fringes of the Yorkshire dales that they fell in in love with the original features of. And they can choose weather or not they sacrifice a few inches of internal room for insulation.
It's less fair on the farm labourer next door in the visually similar house, but hasn't had the money to do any renovation since the 1850's when it was built and has some very original features.
The current system isn't great, but at least with everyone paying a bit too much to fund improvements for the less well off there's some progress.
Not an either/or though, you could have the basic rate and then fund insulation grants from the penalizing high marginal rate.
If you're in work, even on minimum wage, do you spend much time thinking about the unemployed?
Also, Centrica avoided huge windfall taxes on their profits because it was allowed to be offset by investing in new gas exploration.
'£3bn in tax relief for Developing Rosebank (industry-wide)'
Yet onshore windfarm planning applications can be de-railed entirely, by a single objection.
Don't hate the players, hate the game
Very personal opinion.coming...
My sister started a new job with BG and had been working for them for 2 weeks when she was diagnosed with terminal cancer, she started chemo and was on sick for about a year and a half. BG gave her full pay for about 6 months and then 60% after that. She actually got a better prognosis and recovered a bit so went back to work for them about 6 months ago, but has just started chemo again, so needs some more time off. They're happy to give her what she needs.
I know this is nothing to do with the CEO but personally I can't fault them at the moment.
@ads678 I'm sorry to hear about your sister and I hope the prognosis remains good.
The wife of one of my good friends has had a very long term illness. As an employer British Gas have been nothing short of incredible. She had the best part of two years off and is still on that 60% and is currently on a phased return to work now she has recovered.
Every large company has it's flaws, British Gas too. I work with them quite closely on occasion, and while they don't always get it right, the areas I have worked with have 'doing the right thing for their customers' at heart. It's quite refreshing really.
Another point - its probably less than £100 per household. British Gas is the umbrella for all the residential businesses, which include the heating/boiler service. I don't know the split but in the past profit margins for domestic households have been in the 2-4% range.
I used to work in finance for Centrica . There are much simpler , easier ways to ‘get rid’ of money if you need to.
I expect that the usual 'coffee tins' (as we used to call them) are also full.
Just reporting what I have been told by someone who would know.