Npower chief: I will not give up my bonus

The boss of energy firm Npower has dismissed the idea of giving up his bonus amid widespread anger over rising energy prices, saying the gesture would be a “gimmick”.
Npower chief executive Paul Massara has said giving away his bonus would be a 'gimmick'. Picture: PANpower chief executive Paul Massara has said giving away his bonus would be a 'gimmick'. Picture: PA
Npower chief executive Paul Massara has said giving away his bonus would be a 'gimmick'. Picture: PA

Chief executive Paul Massara revealed he earns about £600,000 a year, of which £150,000 is a bonus.

And he was dismissive of his counterpart at Centrica, which owns Scottish Gas, for refusing his bonus.

Hide Ad
Hide Ad

His comments come as the energy industry plans its UK conference in London next week.

Labour has infuriated the so-called “Big Six” energy suppliers by saying it would freeze prices for 20 months if elected in 2015, a move Prime Minister David Cameron has described as “a price con”.

The companies have warned that Labour’s proposal would see an end to investment in infrastructure and have complained that green taxes are behind many of the increases.

However, even former Tory prime minister John Major has attacked the energy companies for putting up prices and called for a windfall tax on profits.

With bills set to hit people hard in the peak winter period, the companies’ bosses were urged by Labour to give up their bonuses.

But when asked if he would follow Centrica boss Sam Laidlaw, who on Monday said he would turn his down, Mr Massara said: “I think the issue is, are we doing absolutely everything we can to keep costs down and to make sure it’s affordable?

“Gimmicks of saying, ‘I’m going to reduce my bonus’ – if Sam was earning five million a year and he’s willing to give a million, good for him.

“My bonus is linked to my performance, is linked to getting it right for customers, is linked to employee satisfaction. All of my team are linked to that. If we don’t deliver on that, we don’t get a bonus.”

Hide Ad
Hide Ad

Mr Massara also warned that power cuts could occur in the future unless there was a “stable environment” for investment. He said: “The amount of spare capacity to meet the peak

requirement has dropped from somewhere around 15 per cent to five.

“That is extremely low by historical levels and unless the UK can create a politically stable environment to attract new capital, that new capital will not come in.”

Referring to Labour leader Ed Miliband’s pledge at his party conference to freeze energy bills if he won the 2015 general election, Mr Massara said: “The more the government creates uncertainty with things like price freezes or other changes, it means there’s less certainty and less likely for capital investment.”

Mr Laidlaw, whose company also owns British Gas, said he decided to give up his bonus, which could be worth around £1.7 million, to help rebuild trust between the energy sector and consumers.

“Just to continue in this world where households are under pressure and assume it is business as normal, is not the way thoughtful remuneration committees think about it,” he said.

Public confidence in energy suppliers was dealt a major blow last month when four of the “Big Six” announced that bills would rise by an average of more than 9 per cent.

Npower announced average rises of 10.4 per cent.

Labour’s shadow business minister Ian Murray, the MP for Edinburgh South, said: “It is a shocking thing for Mr Massara to say when these companies are making huge profits and have hit households and businesses with huge rises.

“This is why we need a price freeze and energy market reform.”