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As of 12:59 16 Jul 2019
Market cap. Pound sterling
5,153.37 million
As of 12:59 16 Jul 2019

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Unions urge vote against 'obscene' pay at Centrica

Iain Conn

Iain Conn, chief executive of Centrica, which owns British Gas, received a 44% rise in his pay last year to £2.4m.

The pay package is being described as "obscene" by the GMB union which has written to major institutional investor to urge them vote against the company's pay at next month's annual general meeting.

Justin Bowden, GMB national secretary, said: “Ordinary Centrica workers are not being offered 4% pay rises, never mind 44%.

“The resulting loss of confidence since the announcement of Iain Conn’s planned rise runs right through the company from top to bottom.

“From call centre staff earning 1/120th of the CEO’s pay, to the very highest levels of management are utterly demoralised by the poor judgement and lack of leadership.

“It is a classic boardroom case of ‘do as I say, not as I do’."

The GMB said it has 15,000 members in Centrica, many of whom are themselves shareholders.

The AGM is on 19 May.

Union calls out Centrica over boss pay rise

British Gas van
Getty Images

Trade union Unison has called on British Gas employees to use their votes to prevent Centrica boss Iain Conn from being given a £2.4m pay package at a general meeting in May.

British Gas owner Centrica has so far axed 2,000 jobs at the firm.

“This obscene pay rise shows a total lack of empathy for the situation of employees who are struggling to make ends meet or who may soon be losing their jobs," said Unison's national officer for energy Matt Lay.

“It’s impossible to defend when there are cutbacks throughout the company. Staff should make a stand at the forthcoming AGM.

“At a time when the company is struggling financially and staff face an uncertain future it simply cannot be right that the man at the top is enjoying such a huge pay and bonus extravaganza. We ask him to show some leadership by refusing to take this pay rise.”

Centrica boss's 44% pay hike is 'jarring'

BBC Radio 5 Live

Wake Up To Money

Ian Conn
Getty Images

While Centrica warned on profits back in February because of a "challenging year", the company's boss Ian Conn has been handed a 44% pay increase.

How do institutional investors view these types of pay packets?

Laura Foll, global equity income fund manager at Janus Henderson Investors, told Wake Up To Money that investors don't mind as long as the pay packet "is bench-marked appropriately against its peer group and the incentives structure makes sense."

In short she said if the company does exceptionally well, then the chief executive should be rewarded exceptionally well.

However, she added: "The Centrica performance has not been particularly good" which means Mr Conn's pay hike "is more jarring".

FTSE stable

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The FTSE 100 is little changed in early trading up 13 points at 7,180.97.

Pearson, which published results earlier, is the biggest riser with a gain of more than 3%,

Centrica, which plunged yesterday, is once again one of the biggest fallers. It is down 1.5% while Barclays, which reported results on Thursday, is off 1.7%.

In the FTSE 250, Dairy Crest is up 12% after agreeing to a £975m takeover.

The biggest faller, down nearly 5%, is CYBG which did not receive any of the RBS funds being released to bolster competition in banking.

Focus on Centrica

BBC Radio 5 live

British Gas van
Getty Images

Centrica, owner of British Gas, could be a focus again today after being the biggest faller in the FTSE 100 yesterday.

Emily Waterworth of Brewin Dolphin told Wake Up To Money that the move in the share price was caused by the focus on the company's dividend, which could be cut. That could be caused by "factors outside the management's control".

The company says it is being hit by the energy regulator's tariff price cap.