Scottish Gas owner Centrica looks within for new chief executive

Scottish Gas owner Centrica has ended a nine-month hunt for its new chief executive by appointing its own finance director into the top role.

Chris O’Shea has been made group chief executive on a permanent basis with immediate effect.

Chris O’Shea, who has been with the business – one of the UK’s largest power providers – since November 2018, has stepped up to become its boss.

The post was vacated last month when the company finally parted ways with former boss Iain Conn, who had announced his plans to leave as early as July last year.

Alongside Conn’s departure, Centrica also appointed a new chairman, Scott Wheway, who has sifted through applications since joining just under a month ago.

“In the last few weeks since my appointment I have completed a review of both the internal and external candidates for this role and have come to the conclusion that Chris is comprehensively the best candidate for Centrica,” Wheway said.

He added: “The board is confident that he is the right leader to navigate Centrica through and beyond the present Covid-19 crisis focusing on the welfare of our colleagues and customers, the financial resilience of the company and the agility to move quickly when we emerge from these unprecedented circumstances.”

O’Shea will be paid £775,000 a year before bonuses and other additions. Conn received a base salary of £953,000 last year.

However, the new boss has also agreed to take a £100,000 pay cut while the group deals with the coronavirus outbreak. Centrica is now looking for a new chief financial officer.

In his first public statement since being revealed, O’Shea acknowledged that a large part of his job will be to help the power systems transition to low-carbon options.

Earlier this month, Centrica, which also operates under the British Gas name, said it was looking to slash costs by as much as £400 million, which includes a pay freeze for non-customer facing staff as it braces for a hit from plunging business energy demand amid the Covid-19 lockdown.

The FTSE-100 group said it was seeing an increase in demand for energy among households as Britons have been forced to stay at home, but it added that it was being hit by a “more significant” impact from falling business energy use.

As well as the pay freeze for many staff, the group is deferring all employee cash bonuses, scrapping its final shareholder dividend payout to bolster its finances and halting spending on non-essential projects.

It had already axed executive bonuses for 2019 earlier this year. Centrica has stopped non-essential customer visits to protect staff amid the pandemic, but said it still has several hundred service engineers who have volunteered to carry out essential visits.