Fat cat bank and energy bosses rake in stellar profits as hard-hit families battle cost-of-living squeeze
By Patrick Tooher Consultant City Editor and Brendan Carlin
22:36 05 Aug 2023, updated 00:13 06 Aug 2023
- Analysis of salaries given to chief execs shows they raked in over £100million
Top bosses whose businesses have fuelled the cost-of-living crisis – such as banks, energy firms and supermarkets – have raked in more than £100 million in pay and perks, The Mail on Sunday can reveal.
An exclusive analysis of salaries and bonuses given to FTSE 100 Index chief executives shows they continue to cash in excessively – despite their customers struggling with spiralling food, fuel and mortgage bills.
The findings expose a disturbing divide between multi-millionaire business chiefs – some of whom have benefited from taxpayer-funded subsidies – and hard-pressed families weathering the biggest squeeze on household finances for 40 years.
Tory MP and former Minister Andrew Percy last night condemned the ‘obscene’ pay hikes and warned big businesses not to ‘act like vultures’.
‘Top company bosses have every right to earn a fair wage for top jobs,’ he said. ‘But they don’t have the right to cash in and act like vultures at a time when many families are struggling to make ends meet.
‘That’s especially true of sectors which have profited during the cost-of-living crisis. Some of these reported pay hikes are frankly obscene and I’m not the only Tory MP to think that.’
Our analysis centres on bosses who run businesses that supply essential goods and services, such as gas, electricity, petrol and food.
In the past year, their customers have been hit by a double-whammy – interest rates rising to 5.25 per cent and inflation currently at 7.9 per cent.
This has not only resulted in price hikes in shops and on utility bills, but steep increases in mortgage payments, which boost profits for banks and their bosses.
Many Britons have been particularly affected by the huge jump in energy prices – even though families were spared the full impact due to a Government cap that limited the cost for typical household usage to £2,500 a year.
Despite this, the two best-paid bosses of firms included in our analysis were at the top of oil and gas giants BP and Shell.
BP’s Bernard Looney and Shell’s former chief Ben van Beurden both made around £10 million each last year, with Looney seeing his pay rise by 122 per cent and Van Beurden by 54 per cent.
At the same time, motorists and small businesses had to pay a lot more for their fuel.
A recent investigation by the competition watchdog found drivers paid an extra £3.30 to fill a petrol tank every time at the pumps last year as companies swelled profit margins.
Neville White, of investment company EdenTree, condemned the out-of-kilter pay awards, saying that bloated rewards for executives are ‘out of touch’.
He added that, ‘in the main’, such rewards were due to ‘persistently high commodity prices rather than individual performance’.
As families grappled with energy charges, the price of food also soared nearly 17 per cent last year, figures from the Office for National Statistics show.
But while many shoppers at Tesco, Britain’s biggest supermarket, will have been forced to tighten their belts, its chief executive Ken Murphy took home £4.4 million, our analysis shows.
It would take the average worker at one of his stores almost 200 years to earn that sum.
Murphy’s pay included £102,000 to help him commute from his family home in Ireland to the super-market’s head office in Welwyn Garden City, Hertfordshire. That deal came to an end in March.
Sainsbury’s boss Simon Roberts enjoyed a 36 per cent increase in his rewards last year, taking his package to £4.9 million.
Sainsbury’s tried to defend its boss’s pay while denying it was profiteering.
‘We make 3p on every pound we sell,’ chairman Martin Scicluna recently told shareholders. ‘If we offered you something for £1, and I said I made 3p on that product, I don’t think you would call us a rip-off merchant or a profiteer, but some MPs have.’
At online grocer Ocado, boss Tim Steiner made a relatively modest £2 million last year. However, he has taken home around £90 million in his 13 years as chief executive, despite his company recently reporting a record annual loss of more than £500 million.
Supermarkets feature highly among companies in the FTSE 100 Index, with a wide disparity in pay between boardroom and shop floor.
Andrew Speke, of the High Pay Centre, which monitors boardroom pay deals, said companies should help their lowest-paid staff ‘rather than splurging so much on their highest earner’.
Consumer goods giant Unilever has also been under fire for huge increases in the price of some of its products as well as its over-the-top pay. More than half of its shareholders revolted this year over executive rewards.
Former boss Alan Jope received a total of £4.6 million last year before retiring after he botched a takeover bid. The company wants to hand his successor an even bigger basic salary.
Unilever has been criticised for burnishing its ‘woke’ credentials and for ‘greedflation’ – pushing up prices by more than necessary under the cover of inflation.
A Mail on Sunday investigation earlier this year found that the price of some of its goods, such as Hellmann’s Mayonnaise, had soared, at that point by more than 40 per cent.
Families who have suffered major anxiety about their gas and electricity bills will also be furious to learn that the boss handed the biggest pay rise was Chris O’Shea at Centrica, the parent company of British Gas.
He made £4.5 million last year –five times more than in 2021, when he declined a bonus, saying it would be ‘wrong’ to accept one ‘given the hardships faced by customers’.
Such altruism seems to have worn thin and he decided to accept a bulging pay packet last year – even though many customers were still grappling with huge bills.
Centrica recently reported record first-half profits of almost £1 billion thanks in part to heavy taxpayer subsidies of energy bills.
Conservative peer and former Pensions Minister Ros Altmann said: ‘It seems that the bosses of companies whose performance has been significantly boosted by Government measures are being personally rewarded for doing well courtesy of taxpayer support.
‘Top bosses should demonstrate restraint and acknowledge the benefits their businesses have received from policy interventions.’
Tory MP Alexander Stafford added: ‘It is only right that people at the top of business are paid well for what are very important and stressful jobs.
‘But that should never be an excuse for business leaders to whack up their pay at a time when ordinary families are struggling.
‘There’s nothing un-Conservative about asking company executives to show a little bit of restraint.’
Labour MP Kevan Jones said: ‘It’s just not acceptable for fat cats to be getting such big increases when hard-pressed families are really up against it. I think that a lot of these top company executives were earning a small fortune even before these sort of massive rises.
‘They really aren’t living in the real world.
‘Quite a few should be taking a long, hard look in the mirror and asking themselves: can I justify this pay hike?’ Motorists who have had to pay much more at the petrol pumps might look on in envy at John Pettigrew, chief executive of National Grid, who took home £7.3 million last year.
His perks included the use of a car and driver – costing the energy transmission firm £43,500 – on top of his £12,000 company car allowance.
In an earlier controversy, Pettigrew claimed £500,000 to move home from Leamington Spa to London in 2019.
Water companies have also come under close scrutiny for dumping huge amounts of untreated sewage into rivers and failing to stop leaks.
That didn’t prevent the bosses of Severn Trent and United Utilities – the two biggest water firms on the stock market – from receiving more than £3 million. Banks have also been in the dock for failing to pass on recent rate rises to savers while piling on mortgage misery for millions of homeowners.
The ruse has enabled banks to post big profits – and to pay their executives large bonuses. Bosses at HSBC, Barclays and Standard Chartered all made more than £5 million last year.
The CEO of Lloyds was the lowest paid on £3.8 million.
Dame Alison Rose of NatWest was paid £5.2 million before being forced to quit over her handling of the decision to close Nigel Farage’s accounts at its Coutts arm.
The size of any payoff that she may in future receive depends on the outcome of a probe into the fiasco.
