“Centrica are the fattest of the fat cats. They are about profit not people.” That was the verdict of Elaine Lebethe, the chairwoman of the Lambeth Pensioners Action Group, just one of the 20 protest groups that laid siege to British Gas owner’s annual meeting at the Queen Elizabeth II Conference Centre in London yesterday.
More than a few dissenting voices made it into the hall to give the new chairman, Rick Haythornthwaite, and his board a rough ride. It wasnt just pay packages like director Chris Weston’s £401,000 cash bonus that were under fire.
For instance, Clare Welton of Fuel Poverty Action, who mixed up her beverage and food metaphors, told the board: “When are you going to wake up and smell the coffee? We don’t want a bigger slice of the pie, we want the whole bakery,” a reference to renationalisation, as she castigated the group for installing controversial pre-payment meters in the homes of people who failed to pay their bills.
Fracking – the exploration technology Centrica is keen to enter in the UK – also raised its head in questioning, with both for and against sides present, as did supposed “dithering” over building new nuclear power plants.
One disenchanted shareholder catalogued Centrica’s recent travails – the second profits warnings in six months, poor customer service standards, dividends under threat and the spectre of being the biggest player in an industry which has become a political football – telling Mr Haythornthwaite he had been “recruited into a relative shambles”.
Despite angry shouts from the floor, Mr Haythornthwaite put on a brave face, surprisingly admitting that the company that “balls had been dropped in the past” at the company – which has been recently fined £5.6m for poor customer service. Customer complaints as late as the third quarter of last year were “far too high”, and he was looking for “changes to the fabric of the business”.
As for the profits warnings, these was squarely put down to a mild winter. But it was politics – the threat of a price freeze from an incoming Labour government, a full competition inquiry and worsening fuel poverty – which loomed largest.
The chief executive, Sam Laidlaw, said he had “real concerns that a two-year market investigation will damage investment”, adding that any such investigation would have to be wide-ranging, encompassing green taxes as well as Big Six profits.
As for Labour’s plans for a price freeze, Mr Laidlaw steered largely clear, other than to state that “political consensus has broken down and the energy industry portrayed as part of the problem”, but in a veiled sideswipe at Labour’s policy pledge he did add: “Only solutions grounded in economic reality have a future.”
Nevertheless, the board were urged by one shareholder to build up a cash pile and reduce debt so they could withstand an attack on their bottom line from a future Labour government, an idea that prompted a loud round of applause. The board gave no specific commitment other than that they were looking at savings to be made through further integration of its natural gas business and to reap the benefits of becoming the biggest energy supplier in the American North-west.
Mr Haythornthwaite may not have had much of a honeymoon, but 96 per cent of shareholders approved the pay packages.
After possibly the most difficult year for the energy giant since the privatisation of British Gas in the mid 1980s, total pay to the board fell to £7.7m in 2013 from £19.5m the year before.