Bloody nose for Centrica chief

CENTRICA faced a stinging revolt from shareholders over its pay as the owner of British Gas fielded angry questions over its decision to slash the dividend.

Some 34pc of the group’s investors refused to back its pay plans because of a controversial share award handed to boss Iain Conn, pictured, when he joined at the start of the year.

Centrica’s board had cut the annual dividend to investors by a third on the back of falling energy costs, which has seen the price of oil halve since last summer. Yesterday at its annual shareholder meeting the company was bombarded with questions over its decision to cut back the payment, which is a lifeline to many small investors.

Shareholder John Farmer complained that the board was ‘paying itself large sums of money for cutting our dividend’ and called on them to take ‘a chainsaw to costs’ to improve profitability.

Another investor said: ‘ You have cut our dividend by 30pc. I can understand that. But has the board taken a reduction in their salary?’

This question was met with rapturous applause.

Phil Clarke, another small investor, admitted he had not told his wife that the dividend had been cut, and said it was a ‘disaster’ for the company to keep buying back its own shares while scaling back the payout. Conn said the decision had been taken ‘ with great reluctance’ but said ‘ the nettle had to be grasped’.

At the annual results, Conn’s first since joining at the start of the year, Centrica plunged to a £1bn loss amid a £1.6bn writedown of its businesses. Influential advisory group Institutional Shareholder Services had told shareholders to vote against a joining share bonus for Conn, worth up to £2.7m.

This was to make up for lucrative rewards he forfeited when leaving BP, where he was a managing director. The shares will only pay out in the coming years if the company hits stretching performance targets. But ISS had slammed the principle of the move. After the meeting, chairman Rick Haythornthwaite said many investors had followed its advice, but denied that one in three shareholders voting against its policies was a ‘revolt’.

He defended the awards, saying the company had needed to dole them out in order to fend off other job offers at rival firms. He said: ‘We took a view that we needed to offer some transitional arrangement because he would be forfeiting the same at BP,’ and described the performance conditions attached to the joining bonus as ‘stringent’.

At the meeting, shareholders said they were worried about the prospect of a Labour victory in the General Election. Analysts have previously warned that Centrica’s share price – which yesterday rose 4.6p to 269.1p – could fall by up to a third if Ed Miliband wins power. The Labour leader has pledged to freeze bills if he becomes Prime Minister.

Speaking afterwards, Conn refused to comment on specific policies, but admitted that investors are ‘worried’. He also said that there is a ‘big difference’ between what politicians say when they are campaigning and what they do once in power. The meeting came after Centrica warned that it had faced further delays at its gas storage facility Rough. A problem in March meant the company had to reduce the capacity of the plant, which accounts for 75pc of the UK’s gas storage, by a third while it assessed the problem. But yesterday it said work would take another six months, and that Centrica has stopped buying gas to put into it over the summer months.

This means the UK will go into next winter with heavily depleted gas supplies. Centrica also said that gas use in Britain had risen by 10pc because this spring was cooler than last spring.

THE boss of footwear brand Jimmy Choo received a £5.35m pay and perks package for less than three months’s work, writes Laura Chesters.

The luxury label, popular with the likes of Jennifer Lopez, Halle Berry and Sandra Bullock, floated in October and yesterday issued its annual report revealing chief executive Pierre Denis received a £5.15m long term share award.

The rest of his package included a percentage of his £650,000 base salary for just over two months’ work and a £55,000 cash bonus.

Other benefits came in at £15,000 and included a company car, school fees for one of his children, private healthcare and an allowance to spend on Jimmy Choo products.

Shares in Jimmy Choo floated at 140p a share and are currently up more than 20pc. The shares slipped 0.1p to 169.9p yesterday.

The group is controlled by JAB Luxury, the investment arm of the German billionaire Reimann family.

The designer brand was founded in 1996 by Tamara Mellon and Malaysian bespoke cobbler Jimmy Choo.

After a series of private equity owners Mellon and Choo left the business. Choo’s niece Sandra Choi is now the brands creative director.