Centrica, the parent company of British Gas, faces opposition over the excessive remuneration of its CEO.
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Centrica's CEO, Chris O'Shea, is under fire from shareholders over his hefty pay package, which will be up for vote next week – just a year after he claimed he couldn't justify it. Our sources reveal that some Centrica shareholders will move against the remuneration report at the annual meeting on May 8th, in response to a recommendation from Institutional Shareholder Services (ISS).
According to a report shared with clients, ISS expressed its opposition due to a significant 28.7% increase in O'Shea's salary. The advisory firm spared no words, calling the salary bump "unjustified" and "excessive." Not only that, but the finance chief's pay jumped by 8.5% – figures that, compared to the broader workforce's increment, are deemed steep[1][2].
ISS described O'Shea's pay raise as lacking a sound rationale[1]. Additionally, the advisory firm pointed out that the remuneration hikes for O'Shea will result in substantial rewards through a restricted stock plan[2].
Last year, O'Shea had admitted on BBC that he couldn't fathom the justification for his multimillion-pound pay package[1]. This earlier confession adds another layer of intrigue to the current situation.
The controversy swirling around O'Shea's pay package comes in the midst of a rough AGM season, as other major companies – including Unilever and Melrose – have also faced sizeable pay revolts[1]. Centrica declined to comment.
Extra Insights
- Justification for the Increase: Centrica defended the pay increase, claiming that O'Shea's remuneration was no longer in line with competitive market rates[3][4]. The annual salary increased from £855,000 to £1.1 million, a rise that industry experts often attribute to performance or strategic demands on leadership roles.
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- The salary increase for Centrica's CEO, Chris O'Shea, has been deemed excessive and unjustified by Institutional Shareholder Services (ISS), sparking opposition from shareholders and a potential vote against the remuneration report during the annual meeting on May 8th.
- The finance chief's pay at Centrica also saw an 8.5% jump, a figure that, compared to the broader workforce's increment, is considered steep according to ISS.
- Centrica defends O'Shea's pay increase, arguing that it is no longer in line with competitive market rates for similar roles within the industry.
- Amidst Centrica's ongoing pay controversy, other major companies such as Unilever and Melrose have also been facing pay revolts during their AGM seasons.
