Gas chief's pay comparisons challenged

Click to follow
The Independent Online
The row over pay at British Gas refused to die yesterday after a shareholder group accused the company of misleading the public and institutions over a pay comparison between its chief executive Cedric Brown and other leading UK companies.

In a television interview, screened after Wednesday's annual meeting, Mr Brown said: "At the end of the day, even though we are the seventh- biggest company, there are still something like 48 or more chief executives in Britain being paid more than I'm getting for running British Gas."

His claims were disputed by Pension Investment Research Consultants, the corporate governance advisers at the centre of Wednesday's rebellion. PIRC has surveyed the accounts of all the 64 FT-SE 100 companies that have reported so far this year, and claim their study places Mr Brown as the 18th best-paid director, well above the half way point.

British Gas also made the claim in a letter sent to the City institutions that came to the company's rescue on Wednesday by voting against the PIRC resolution demanding a rethink on directors pay.

The company wrote: "His annual cash compensation for 1994 was less than that for half of the chief executives of FT-SE 100 companies."

Anne Simpson of PIRC said: "If you compare Cedric Brown's basic salary with the total packages, including bonuses, given to other directors then, yes, he is around the median. What we are looking at is like for like. We have stripped out other people's bonuses."

Although Mr Brown received no bonus in 1994, he will get one this year under the company's long-term incentive scheme. It will be paid in shares and be worth up to 125 per cent of his pounds 475,000 basic salary. This could take his total package to over pounds 1m.

Results of Wednesday's voting, released by the company yesterday, show 16.9 per cent of shareholders voting supported PIRC, with more than 354 million votes cast in its favour.

Prudential, British Gas's largest shareholder with a 3.6 per cent stake, justified its support for the company. It was satisfied the systems used to reward directors were "adequate and not in need of revision".