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Gas chiefs are given bonuses
Robert Lea, City Correspondent31 Jul 2008
British Gas bosses are set to share a £250,000 windfall just one day after the firm announced record-breaking price rises of up to 35 per cent.
British Gas's parent company Centrica today unveiled half-year profits of nearly £1 billion and a 16 per cent increase in the dividend which will see this year's payouts to shareholders top £500 million.
Jake Ulrich, the Centrica executive who famously advised customers to wear a second jumper and turn down the heating if they are struggling to pay bills, is in line to receive total dividend payments of £116,000 on his shareholdings.
Today there was anger at the scale of the profits and calls for a "windfall tax" on the firm whose price risesmean the average household's energy bill will be £110 a month.
Adam Scorer, campaign director of Energywatch, said: "Customers will be outraged to learn that while they ponder how to make ends meet Centrica's shareholders are enjoying an increase in their dividends."
British Gas's managing director Phil Bentley, who was on TV news bulletins telling Britons to do something about energy waste, is to pick up dividend cheques for £84,500 - supplementing his annual pay of £1.1 million.
Meanwhile, Centrica's £1.8 million-a-year chief executive, old Etonian Sam Laidlaw, will receive payouts worth £46,000. He sought to justify the increase by saying that the company had to reflect shareholder interests as well as customers.
"This is a business that has got a million shareholders - a lot of pension funds and people have got their savings invested in British Gas shares and we have to look after them," he said.
He went on: "The dividend is purely mechanical... If we suddenly changed our policy that would make our shareholders nervous."
French-owned EDF Energy became the first major energy company to lift prices last Friday - 17 per cent for electricity and 22 per cent for gas - blaming record oil prices for the move. Other rivals among the UK's "big six" are sure to follow EDF and Centrica after Scottish & Southern Energy said it was becoming "more difficult by the day" to resist hitting customers with higher bills.
Reader views (6)
Government is doing nothing to prevent huge profits from any consumer related businesses simply because record profits mean higher tax on profits for the exchequer. Whilst the fat cats are cocking a snook at everyone by rewarding themselves with fat bonuses. Windfall taxing does nothing to help the consumers which is extra taxes for the government Coffers.
- Dennis Woodcock, Bourne UK, 05/10/2009 14:25
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An outrage.
It would take a Premier League footballer weeks to amass that sort of money. Well, days, anyway.
- Drew, London, 05/10/2009 13:25
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I think that this is outrageous giving a sum of £250,000 as a bonus. Why not put the money back in our pockets as we seem to be paying BG for gas which is either sold off and brought back again. Why should we the consumer pay high fees for gas. This pricing increase has to stop after all not everyone is a millionaire.
- Jacqui, Berkshire, 05/10/2009 13:25
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Rather insensitive timing.
Windfall tax it is then.
- Barry L Smith, London, 05/10/2009 13:25
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Simon, perhaps the point of it is that that private companies should also have social responsibilities. Perhaps the point is that private companies should be making their profits through efficiencies rather than raising their prices. Perhaps the point is that private companies should be reinvesting in their infrastructure.
Or perhaps it is the simple one of: don't be giving bonuses out at a time when you are saying you need to put prices up as it makes you look like money grabbing robbers.
- Pat, United Kingdom, 05/10/2009 13:25
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Not sure I get the point of this article. Let me try; private company selling products to retail end-user, making lots of money, despite recessionary environment, so we are objecting to bonuses getting paid? Is that the hook, private companies aren't allowed to make money in a recession? Or did the author forget the BG isn't state owned anymore. Or do we have a new communist regime in Westminster and non-one told me?
- Simon, Kenley, Surrey, 05/10/2009 13:25
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