Turmoil in Centrica’s boardroom worsens as heir apparent quits
Centrica’s chief executive, Sam Laidlaw, wants to leave, its finance director, Nick Luff, is quitting, and now British Gas’s chief executive, Chris Weston, is off to become chief executive at Aggreko
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Deputy Business Editor
Wednesday 28 May 2014
The boss of British Gas was on the verge of quitting on Wednesday night after coming under repeated fire for high energy bills and massive bonuses.
News of his departure threw the parent company Centrica into yet deeper turmoil and gave rise to talk that the public anger over bills was driving executives out of the industry.
Centrica’s chief executive, Sam Laidlaw, wants to leave, its finance director, Nick Luff, is quitting, and now British Gas’s chief executive, Chris Weston, is off to become chief executive at the temporary power generators group Aggreko.
Mr Weston, 50, had been seen as a potential successor to Mr Laidlaw as Centrica’s chief executive, but he is quitting for what will be a far quieter posting. He only lasted in the British Gas role for a little over a year.
He has been repeatedly calling for less confrontation from politicians over energy prices, declaring in March that the “political consensus” over energy had broken down.
The industry is facing its biggest investigation ever by the Competition and Markets Authority to assess whether the big players have too monopolistic a grip and excessive power over pricing. The Big Six have 95 per cent of the market and, as by far the biggest player, Centrica/British Gas has been in the front of the line of fire.
The Energy Secretary, Ed Davey, meanwhile, has accused Centrica of failing to invest enough in the UK’s energy infrastructure.
It has been speculated that Mr Laidlaw’s post could be filled by Iain Conn, BP’s head of marketing and refining, but some sources cautioned that such a deal was less imminent than Mr Weston’s move. “That’s quite speculative,” the source said.
Mr Weston’s departure means another headache for Centrica’s new chairman, Rick Haythornthwaite, who now has to fill the three most senior positions on his board.
Mr Weston will surely come in for less public criticism at Aggreko than Centrica, where he has been vilified for getting a £401,000 cash bonus – announced just days after the company issued a profit warning. He was also criticised for failing to turn up in person to explain price rises to the Energy Select Committee, sending his deputy instead.
The intense scrutiny and controversy over Centrica’s behaviour and the energy industry in general is thought to have played a part in the executives’ reasons for wanting to leave.
As for Mr Conn, Sky News reported that his appointment to run Centrica was being held up by negotiations around his shareholding in BP, where he has worked since 1986. He has about £3m in BP shares and additional performance-related awards totalling about £16m. Traditionally, the company hiring such an executive would buy them out of their yet-to-be awarded share schemes, but given Centrica’s high public profile that could be politically difficult.
Sam Laidlaw recently gave his bonus to charity rather than face public scorn at a time of rising fuel poverty for many British Gas customers.
Mr Conn is a senior figure in British industry, holding grandee positions at the CBI and various other high-profile business and trade organisations. He recently took up a non-executive post at BT and is dropping a long-standing non-executive directorship at Rolls-Royce.
It was not clear as The Independent went to press when Mr Weston’s departure was likely to be announced, with sources suggesting it was extremely imminent.
Mr Weston’s move will be seen as a coup for Aggreko, whose chief executive Rupert Soames quit after 11 years to run the troubled outsourcing group Serco. Speculation has it that Mr Soames wants to bring his old Aggreko finance director with him, meaning Mr Weston could have to act quickly to find a replacement when he arrives.
Angus Cockburn has been working as interim chief executive at Aggreko in Mr Soames’ absence.
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