Gas fat cat pockets £28m in a year as pensioners struggle to pay bills

By Becky Barrow

Frank Chapman, who is the chief executive of gas production firm BG, scooped a pay and pension package worth £28m last year

The boss of one of Britain’s biggest gas giants scooped a pay and pension package worth an astonishing £28million last year, it emerged today.

The size of the handout given to Frank Chapman, chief executive of the gas production firm BG, fuels the row surrounding executive fat cats.

It comes as families are being crippled by average gas bills of £750 and around four million households are in fuel poverty, spending more than 10 per cent of their income on fuel to keep warm.

Experts said yesterday that customers, who struggle to afford their bills, see the gas industry as a ‘rip-off’.

Scott Byrom, gas and electricity manager at the comparison website Moneysupermarket.com, said: ‘There needs to be more transparency in the industry.

‘When you find out that they are making so much money, it is only right and understandable that consumers are going to say: ‘You are ripping us off.”

The 56-year-old, who has run the business for nearly a decade, got a basic salary of £1.14million and a bonus of £1.6million last year, according to the company’s latest annual report.

But this seven-figure sum is just the start of his bumper remuneration.

He got a further £5.26million from a ‘long-term incentive scheme’ but the biggest payment of £15.5million came from share options which he exercised in September.

Mr Chapman also enjoyed a £4.6million boost to this pension pot, largely due to an actuarial change, which means his gold-plated retirement package has a transfer value of £14million.

In total, this means that his package was worth more than 1,000 times the average salary of the typical British man who works full-time but only gets a salary of just under £28,000.

The revelation comes a few days after the head of the UK’s biggest business lobby group warned that bosses of big companies risk being ‘treated as aliens.’

Richard Lambert, director general of the CBI, warned that the public is becoming increasingly appalled by their massive pay deals.

He said chief executives of Britain’s 100 largest firms earned 81 times the average pay of a full-time worker last year. In 2000, it was only 47 times.

In a speech in London last week, Mr Lambert warned that pay deals, which can be as long as telephone numbers, make it tricky to justify the importance of business.

He said: ‘It is difficult to persuade the public that profits are no more than the necessary lifeblood of a successful business if they see a small cohort at the top reaping such large rewards.

‘If leaders of big companies seem to occupy a different galaxy from the rest of the community, they risk being treated as aliens.’

Mr Lambert said that pay has changed dramatically in recent times with managers able to earn more than ever before.

He said: ‘For the first time in history, it has become possible for a manager – as opposed to an owner – of a large public company to become seriously rich.’

BG Group is a global natural gas business which is engaged in the exploration, development, production, transmission, distribution and supply of natural gas.

It used to be part of British Gas until the company was split into two separate businesses – BG and Centrica – in 1997.

Wholesale gas and electricity prices are down by 60 per cent from their peak in the middle of 2008, yet most household tariffs have fallen by less than 10 per cent.

Analysts are expecting more than 40,000 deaths this winter from health conditions made worse by freezing temperatures.

Yesterday a spokesman from BG said: ‘The large majority of the total remuneration of our directors is performance driven. We have performed strongly in comparison to our peers.’
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