Boss of British Gas owner gets 44% pay rise to £2.4m following announcement 4,000 jobs are to be cut

Ian Conn is paid 59 times more than the company’s average worker despite losing hundreds of thousands of customers

The boss of British Gas owner Centrica saw his pay jump 44 per cent to £2.4m last year while the company cut thousands of jobs and issued a profit warning.

Ian Conn enjoyed the bumper pay rise despite British Gas losing 742,000 customers in 2018 as households switched to rival providers. That was an improvement on the 1.4 million British Gas lost in 2017 when Mr Conn was paid £1.7m.

The chief executive is paid around 59 times more than the median British Gas worker who earns £41,822. Meanwhile prices for consumers have soared. More than half of British households have seen bills rise this month by an average of more than £100 after regulator Ofgem increased its energy price cap.

British Gas ranked 26th out of 30 energy companies for customer service, in a survey by consumer group Which?. The UK’s largest energy supplier has a poor telephone customer service line and does not offer value for money, according to a poll of thousands of households.

But Mr Conn saw his total pay rise sharply as he collected an annual bonus, according to the company’s annual report.

In February Centrica warned that profits will be £300m lower because of Ofgem’s cap which was introduced in December.

Luke Hildyard, executive director of the High Pay Centre, said the gap between CEO and average workers’ pay was was “striking”.

He added: “No one is suggesting that everyone should be paid the same, but Centrica might find it hard to justify paying their CEO so much more than their wider workforce, particularly in an industry where even the lower paid workers are doing skilled and important work.

“There has already been reported anger at Centrica about changes to the staff pension arrangements, and a pay ratio of 59:1 might exacerbate this further.”

Centrica’s annual report said: “Iain has shown significant resilience in the face of this challenge and has led the business through the shifting context, keeping the strategic objectives in sight and ensuring that the organisation remains adaptable and innovative.”

It is not the first time that the British Gas boss has been criticised over his pay deal. In 2017 it was revealed that Mr Conn had been handed £4.1m, a pay rise of almost 40 per cent on the £3m he pocketed the previous year.

The first of Centrica’s latest round of job cuts began last week with up to 500 staff axed following the closure of offices in Glasgow and Leeds.

The rest of its planned cull of workers is to take place over the next three years. Centrica has let 5,500 employees go since the start of 2016.

Last month MPs ordered the UK’s largest companies to cap sky-high salaries for top bosses and align them more closely with ordinary workers, or face the wrath of a new regulator.

A hard-hitting report from the Business, Energy and Industrial Strategy Committee examining the subject claims that soaring chief executive pay packages at FTSE 100 firms are a symbol of “corporate greed” and are tarnishing Britain’s reputation.

The research concludes that a stronger link should be made between executive and employee pay, citing “huge differentials” in the pay system.

Rachel Reeves, chair of the Business, Energy and Industrial Strategy Committee, said: “The roll call of dishonourable executive pay decisions at firms – including Persimmon, Unilever, Royal Mail, BT, Melrose and Foxtons – tell the all too familiar tale of corporate greed which is so damaging to the reputation of business in our country.

“But these examples also highlight the persistence of executive pay policies where far too little weight is given to delivering genuine long-term value, investing in the future or ensuring rewards are shared with workers.”