Ex-Centrica Chief To Hand Bonus To Charity

The former boss of Centrica (LSE: CNA.L - news) , Britain's biggest energy supplier, is to hand "a substantial portion" of his annual bonus to charity for the second successive year.

Sky News has learnt that Sam Laidlaw, who stepped down as chief executive of the parent company of British Gas at the end of December, has decided to donate part of an award of approximately £500,000 to voluntary causes.

The £500,000 bonus will be disclosed in Centrica's annual report, which will be published on Thursday.

Sources said that in addition to the annual bonus and his base salary of just under £1m, Mr Laidlaw will also receive a payout under the company's long-term incentive plan of roughly £1m, which will vest next month.

His total remuneration for 2014, including pension contributions and other benefits is understood to have been in the region of £3m, roughly one-third higher than the previous year.

A source pointed out that the increase was because Centrica's remuneration committee had not made any awards under its long-term share scheme for 2013.

The details will be closely scrutinised in Westminster at a time when energy companies are firmly in politicians' crosshairs ahead of the General Election.

However, any criticism of Mr Laidlaw's pay is likely to be tempered by his decision to give what one insider said was "a substantial portion" of his £500,000 bonus to charity.

The £3m total pay figure represents less than half the theoretical maximum that Mr Laidlaw could have earned under the policy set out in last year's annual report.

Under Centrica's remuneration policy, Mr Laidlaw will remain eligible for an award to be paid out in 2017 worth 25% of a £1.9m maximum opportunity allocated to him during the course of last year.

However, sources pointed out that that future payout was "highly uncertain".

The news of Mr Laidlaw's remuneration package for last year emerges on the day that his successor, Iain Conn, meets competition watchdogs as part of their inquiry into the UK energy market.

Centrica's meeting with the inquiry panel is seen as being particularly important because as the market leader in residential gas and electricity supply, it is the likeliest target of any attempt to break up big providers.

The CMA said last month that about 40% of Centrica's domestic gas customers had been with the company for more than a decade, which is likely to prompt questions at Wednesday's meeting about the profitability of these so-called 'sticky customers'.

Mr Conn is already facing a challenging start to his career as Centrica's chief executive, announcing several weeks ago that it was cutting its dividend for the first time since 1997 in the wake of sharp oil price falls and mild winter weather.

The move was designed to protect Centrica's credit rating, but it has since been downgraded by Moody's, the ratings agency.

An overhaul of the energy market is likely to feature prominently during the General Election campaign, with Ed Miliband, the Labour leader, having pledged to freeze energy prices until 2017 if he wins in May.

The political battle over the cost of living has led both sides of the Coalition to promise tough action against energy companies.

Matthew Hancock, the Conservatives' Business and Energy Minister, wrote to the largest energy companies, after which they all announced price cuts, while Ed Davey, the Energy and Climate Change Secretary, has repeated a public threat to break up the 'big six'.

EDF Energy, EOn (Taiwan OTC: 3411.TWO - news) , Npower, Scottish Power and SSE (LSE: SSE.L - news) have all met with the CMA inquiry panel in the last fortnight‎.

Centrica declined to comment on Wednesday.