‘When WPP does well, I do well,’ Sir Martin Sorrell told the Press Association yesterday, in defence of his bumper £63m pay package. It’s a logic that’s hard to disagree with, but not one that bosses in the crisis-hit energy industry can rely on at the moment.
After shareholders rejected the pay package of BP boss Bob Dudley last week (albeit in a non-binding vote) today it was the turn of Centrica chief exec Iain Conn to face a backlash. The PIRC (which advises insitutional investors) called for his £3m pay package to be voted down, but while a majority gave it the thumbs up, 15% of proxy shareholders (which represent 72% of the total) voted against ahead of its AGM this morning. That's better than last year, when 33% voted against, but it still shows not everybody is happy.
The British Gas owner has had a better year than BP - mainly because it’s focused more on the provision of energy to consumers than on harvesting it from the ground. But the fact its share price is down 10% over the last year and that it has just announced more job cuts makes Conn’s £3m pay-out for this year harder to justify.
The energy giant updated investors ahead of its AGM this morning, announcing that British Gas had returned to profitability, ‘higher net promoter scores and lower complaints in our customer-facing businesses,’ and £200m worth of efficiency savings set to be delivered this year. But it also admitted that it has lost a net 1.5% of UK customers in the first quarter and that it would shed 3,000 jobs this year.
There were few numbers regarding its ‘upstream’ exploration and production business, which has faced a tough time of things after the global slump in oil prices. Centrica's share price was down 2.5% at the time of writing.
After what happened at BP last week Conn wasn't the first FTSE boss to face a pay rebellion this year, and with the AGMs of Reckitt Benckiser, HSBC and Astrazeneca on the way in the next few weeks he’s unlikely to be the last.