Shareholders erupted in anger after boss Iain Conn pocketed a 44 per cent pay rise – despite the company issuing a profits warning after a £70million price-cap kicked-in and shocking customer exodus hit the bottom line. In the first four months of 2019 the firm lost 234,000 UK household customers. This follows on from a disastrous 2018 for the company when it said goodbye to another 742,000 customers. Despite this CEO Mr Conn took home an eye-watering £2.4million for 2018, up by £740,000 from the £1.7million from the previous year – as revealed in the annual report from Centrica. Almost 15 percent of investors voted against the pay rise, which comes off the back of Centrica shares falling 66 percent since Mr Conn took over in 2015.
Speaking at the annual general meeting in London, one shareholder was quoted by This is Money as asking: “Why do you lot need this absurd remuneration for losing your shareholders money? You don’t.”
Another accused the “board of charlatans” of offering “absurd” executive pay despite “woeful shareholder returns”.
According to ITV news, one investor joked his bonus was worth £1 for every customer who left British Gas last year.
Mr Conn said he spent all the money he received in bonuses on buying shares in the company.
Before the meeting, Centrica painted a gloomy picture for British Gas as the company warned warm winter weather and a £70 million hit from the energy price cap would impact first half results.
Britain’s biggest energy provider said it saw a “challenging” start to 2019, with falling UK natural gas prices adding to the woes.
It also said it lost another 234,000 UK household customer accounts over the first four months of the year.
This follows on from a disastrous 2018 for the company when it said goodbye to 742,000 customers.
However, Centrica left its full-year outlook unchanged for operating cash flow and debt as it expects cost savings to ramp up in the final six months of 2019.
British Gas gross revenues rose 54 percent in the four months.
The group made savings of £58million to the end of April and is on track for £250million over the full-year, including moves to axe up to 2,000 jobs in 2019.
Iain Conn, group chief executive of Centrica, said: “Although operational performance has been largely in line with our plans, external factors have presented challenges for Centrica during the first four months of 2019, in the form of the default tariff cap, warm weather, and falling gas prices.
“We have also experienced extensions to nuclear outages.
“However, we continue to focus on those things we can control and as a result we expect to achieve our 2019 cash flow and net debt targets, while we are making further progress on cost efficiency delivery and on demonstrating margin capture capability.”
Centrica warned in February that the energy price cap will knock its 2019 performance.
Last July, the Government passed a Bill which called on Ofgem to impose a cap on all default energy tariffs, including the standard variable tariff, which came into effect at the start of the year.”
Published at Tue, 14 May 2019 14:59:00 +0000