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British Gas boss fights for his job: Iain Conn under fire after shares tumble 60% on his watch to hit a 20-year low

Daily Mail logo Daily Mail 5 days ago Lucy White and Francesca Washtell For The Daily Mail
Iain Bell, a gas lamp lighter engineer from British Gas, poses as he winds up a clock inside a gas lamp as he works in Westminster, central London on April 24, 2018. - 1,500 gas lamps, some of which are 200 years old, continue to light some secret and beautiful corners of the British capital and are maintained by hand by a five-man team, supervised by engineer Iain Bell. (Photo by Daniel LEAL-OLIVAS / AFP)        (Photo credit should read DANIEL LEAL-OLIVAS/AFP/Getty Images) © Getty Iain Bell, a gas lamp lighter engineer from British Gas, poses as he winds up a clock inside a gas lamp as he works in Westminster, central London on April 24, 2018. - 1,500 gas lamps, some of which are 200 years old, continue to light some secret and beautiful corners of the British capital and are maintained by hand by a five-man team, supervised by engineer Iain Bell. (Photo by Daniel LEAL-OLIVAS / AFP) (Photo credit should read DANIEL LEAL-OLIVAS/AFP/Getty Images)

The boss of Centrica is fighting for his job as investors lose faith in his leadership. Iain Conn has been chief executive of the British Gas owner since 2015 – picking up £11.1million in pay along the way.

But the FTSE 100 group's shares have tumbled 60 per cent on his watch and are at their lowest level since 1999. The father-of-three's position is seen as particularly vulnerable since the arrival of Charles Berry, who succeeded Rick Haythornthwaite as chairman in February.

One major institutional investor said: 'With the new chairman coming in, Iain Conn's days are numbered.' And with Centrica's prized dividend under threat, a City source told the Mail that major shareholders are questioning Conn's future.

The source said: 'Shareholders have voiced desires to see a change in management. I think, personally, people have no issues with Iain Conn. But there wouldn't be too many who would be disappointed if he went.'

Conn has also attracted the ire of retail investors who have seen the value of their savings plummet from 279p a share when he took over in 2015 to 109.05p at the close of business yesterday.

The slump has slashed Centrica's value from £15.9billion to £6.2billion. The backlash among shareholders comes a week after it emerged that Conn, 56, enjoyed a 44 per cent pay rise to £2.4million in 2018.

a close up of a man: Under fire: Iain Conn has held been chief executive of the FTSE 100 giant since the start of 2015 - picking up £11.2m in pay along the way © Provided by Associated Newspapers Limited Under fire: Iain Conn has held been chief executive of the FTSE 100 giant since the start of 2015 - picking up £11.2m in pay along the way

The rise of £740,000 covered a year when British Gas hiked bills for millions of families and saw 742,000 customers leave. The City source said: 'The new chairman only started at the beginning of the year and he's unlikely to change the chief executive immediately.

'But by the time we get to the middle of the year, maybe he's had a bit more time to think about the business, speak to those shareholders and understand the issues.

'Speaking to a number of major shareholders, there are plenty of questions around Conn's strategy. 'The core business is obviously struggling, and Centrica is looking to innovate in other areas to compensate for some of that.'

Those areas include connected home devices such as Hive, which allows customers to control their lights, heating and security cameras from their phone over the internet, and energy management for schools and hospitals which need on-site generators or solar panels.

While investors may be more convinced by Centrica's moves into the energy management niche, they are raising red flags about the emphasis on connected homes. Some worry Centrica could be outmanoeuvred by tech experts such as Google or Amazon. 

Conn is also facing a backlash at the annual general meeting on May 13. Trade union Unison, which represents around 5,000 Centrica employees, is rallying staff who hold shares in the firm, as well as institutional investors such as pension funds, to vote against Conn's pay package.

a screenshot of text © Provided by Associated Newspapers Limited

Matt Lay, national energy officer at Unison, said: 'Staff feel badly let down by Iain Conn. We don't believe he has demonstrated leadership on this issue.

'This man is being rewarded for performance when the business is shrinking. It is a reward for failure for a boss who doesn't appear to have identified a strategy to right the business. It's incredibly insensitive and destructive, and sets a bad example.'

Conn is understood to have support among other shareholders, however. Advisory group Glass Lewis, which speaks for around 30 per cent of Centrica investors, have publicly backed both his pay and his reappointment.

Centrica this month announced another 500 jobs are at risk – 400 of which are based in Glasgow –- as part of the company's plan to cut 2,000 jobs this year. It has axed 7,700 jobs since 2015. Centrica declined to comment last night.

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