Energy chief defends £10m pension pot
Anger as SSE warns of more price rises to come
SSE’S outgoing chief executive has defended his £10 million pension pot as the energy giant came under fire over warnings of future price hikes.
Ian Marchant’s comments over his £10.4m arrangement, which will provide him with an annual income of £420,000 after he turns 60 in nine years’ time, comes as the Perth-based firm warned more price rises were in the pipeline.
The firm blamed rising costs as its income rose £410m thanks to householders keeping their heating switched on through the lengthy cold spell that ran into spring.
Mr Marchant, who is also to receive £6.3m worth of shares, said he is giving £329,000 of his bonus to help provide better staff training.
But he added: “I could make 10 times more money in the private equity world for a tenth of the scrutiny that I currently get.”
He earlier gave up shares due from an incentive scheme dating back to last year, which he said was because of his desire to make a “clean break” from the company he has led since 2002, when he leaves on June 1.
Mr Marchant, who conceded executive pay is too generous, said that the amount of scrutiny on boardroom figures in stock market limited companies is driving many senior employees into the private market.
He added: “We have become more American in our rewards. I am not sure that executive rewards have kept proper balance with the economy. As a class they are too high.”
Mr Marchant, 51, is also expected to leave with 377,840 shares, worth nearly £6.3m.
Mr Marchant said that SSE will seek to resist bill rises but warned that prices will go up if wholesale costs remain at current levels.
SSE raised household bills by 9% last October, said that household consumption of gas during the last 12 months rose by 21%, while electricity use went up by 5%.
The company said in a statement: “Unless there is a sustained reduction in prices in wholesale gas and electricity markets, it is highly likely that these additional costs will eventually have to be reflected in higher prices for household customers.”
It added that it intended to resist this trend of higher costs for as long as possible to shield customers from the unwelcome impact of
c‘ I ould make 10 times more money in the private equity world for a tenth of the scrutiny that I currently get
higher prices. SSE was fined £10.5m for misleading customers about prices and savings that could be made by switching over from another supplier.
Executive bonuses have been slashed by 40% in the wake of the scandal, and chairman Lord Smith of Kelvin yesterday issued another apolog y f or the company’s failure.
Ann Robinson, director of consumer policy at uSwitch.com, said: “People have been going cold for fear of the cost of turning their heating on – in these circumstances a price cut or a price freeze is the only suitable peace offering and would go some way to helping and reassuring consumers.
“SSE has gone part of the way by saying that it will be holding off from a price hike for as long as possible.
“Whether this will be enough to reassure consumers remains to be seen.”
Labour’s Shadow Energy Minister, Rutherglen and Hamilton West MP Tom Greatrex, said that the time had come for a shakeup of the way energy companies do business.
He said: “It’s another day and another energy c o mpany announces record profits. Like all the other big energy firms, when SSE imposed inflation-busting price hikes last winter, they claimed they had no choice.
“But these figures show they have increased their profits on the back of spiralling bills for hardpressed people.”