British Gas Faces Shareholder Rebellion Over CEO Pay Amid Energy Crisis

British Gas owner Centrica has faced significant backlash from its investors after nearly 40% voted against remuneration plans for its chief executive, Chris O’Shea, during the company’s annual meeting in Manchester. The controversy arises as rising energy prices leave many households struggling with record debts while O’Shea received a £4.3 million pay packet last year. His basic salary alone increased by 29% to £1.1 million.

The rebellion reflects growing dissatisfaction among shareholders and activists over perceived profiteering during the ongoing energy crisis. Consumer groups, fuel poverty campaigners, and environmental activists have criticised Centrica for benefitting from surging energy prices in the wake of Russia’s invasion of Ukraine. Household energy debt and arrears have climbed to £3.8 billion—an increase of £2 billion since early 2022.

Centrica’s market value has risen by over 250% in five years, driven by escalated energy market prices following the Covid-19 pandemic and geopolitical tensions. Despite this, shares in the company dropped 7.5% after it warned that mild spring weather could reduce its first-quarter profits.

Concerns over O’Shea’s remuneration were heightened after leading proxy adviser Institutional Shareholder Services (ISS) recommended a vote against his pay packet, arguing that the increase was disproportionately higher compared to the wider workforce and lacked sufficient justification. Last year, O’Shea acknowledged the difficulties in justifying such high pay levels, admitting it was “impossible to justify” salaries of this magnitude while many customers endured hardship.

Campaigners, including Greenpeace UK, have called on the government to introduce caps on executive pay and bonuses for energy firms. “It’s clear the profiteering in this industry has gone too far when even shareholders reject excessive pay rises,” said Mel Evans of Greenpeace. She accused energy companies of exacerbating the cost-of-living crisis while reaping enormous profits at the expense of struggling customers.

A Centrica spokesperson stated that while the majority of shareholders backed the pay plan, the company will continue constructive dialogue with investors and provide updates within six months of the meeting.

This revolt comes as scrutiny over executive compensation extends beyond Centrica. Tesco’s CEO, Ken Murphy, experienced a £1 million drop in pay due to missed bonus-linked targets; however, his total pay still reached £9.23 million, making it 373 times that of the average Tesco employee. Compensation practices among top executives are increasingly drawing public and investor attention across industries.