Sam Laidlaw, the former boss of one of Britain’s biggest energy giants Centrica, pledged to give away part of his 2014 £592,000 bonus to charity, says the Daily Mail.
However, according to Centrica’s Annual Report, he’s not exactly going to go hungry – he’s set to receive £1.4 million in shares this week.
Laidlaw announced in July last year that he would step down as CEO of the parent group of British Gas but he did not leave until the end of 2014. Since he has now left, he is eligible to collect the share windfall as part of several long-term remuneration schemes.
In total, Laidlaw will receive nearly £3.4 million for his last year at Centrica. He received £967,000 as a basic salary, £592,000 as a cash bonus, and now £1.4 million in share awards. He also received £418,000 in pension contributions.
Also, even though he has left Centrica, he can technically receive smaller bonus payouts over the next two years if he does not take on a senior executive role at another FTSE 100 company. These payouts will be activated if the company hits certain financial and stock performance targets. The scheme is intended for executives at Centrica to build a long-term sustainable business.
So, effectively, he could be paid for being unemployed.
In 2013, he received £950,000 as a basic salary and £851,000 as a cash bonus.
His bumper payout may cause anger amongst investors as Centrica cut its dividend for the first time. The energy giant confirmed that it will slash its 2014 final dividend by 30%. This will impact 650,000 small shareholders.
The Centrica stock price is down 20% over the past year.
But it wasn’t just a 60% drop in oil prices that hit the group hard, it was also a range of weather and political issues.
Centrica said record mild weather in Britain as well as extreme cold weather in America hurt its profits because of the “highly competitive market environment on both sides of the Atlantic.” This led to a 23% drop in profits at British Gas’s residential business, which fell to £439m.
“2014 was a very difficult year for Centrica and the recent fall in oil and gas prices creates further challenge,” said Iain Conn, CEO at Centrica in a statement at the time. “We are cutting investment and costs in response. However, it is with regret that, along with reducing capital expenditure and driving efficiency beyond planned levels, we have taken the difficult decision to rebase the dividend by 30%, commencing with the final distribution for 2014.”