Those of a certain age will remeber the “Tell Sid” adverts that advised the British public to snap up shares in the soon-to-be privatised British Gas. Poor old Sid. If someone did tell him and he forgot to sell his shares for a quick buck, he’s been taking a beating.
What he bought in the British Gas sell-off in 1986 has since been broken up and renamed and shuffled about a bit. And yet Centrica, the current owner of the brand, has lost around a third of its value since recording a high of just over 400p in September 2013.
So the Sids have been suffering, but that hasn’t stopped the Cedrics – by which I meant the company’s overpaid executives – having a whale of a time.
Actually, calling them Cedrics – after the former British Gas chief executive Cedric Brown, whom unions depicted not as a fat cat but a fat pig – is a little unfair. Mr Brown received that unwanted description when his pay rose by 75 per cent to £475,000 at the end of 1994. That’s less than £1m in today’s money – more like £700,000.
But what had really angered the unions wasn’t the money but that Mr Brown made it while busily laying off workers. That’s what his latest successor is now doing in an attempt to arrest the declining share price. Except that he is on a cash and shares package worth £3m more than Mr Brown’s.
It says much that when Iain Conn was appointed, the pay package was actually considered to be relatively restrained when compared with the money that his predecessor Sam Laidlaw had been making.
Mr Conn said he didn’t make the decision to ruin the summer holiday plans of 6,000 people lightly. How comforting. The plans, under which gas exploration will be slashed and wind farms sold off, are designed so the company can “compete more effectively for our customers” – customers who fuelled the doubling of profit at the company’s much- criticised residential arm.
Mr Conn isn’t really doing it for them. He isn’t really doing it for the Sids either, although they may benefit. He’s doing it for the City and for his fellow Cedrics, whose eyes are focused on the sort of long-term incentive schemes that make Mr Brown’s package look almost an after thought.Reuse content