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Ofgem’s chief executive says his senior staff have donated their bonuses to charity due to the ongoing energy crisis, after a report showed the company awarded more than £1.1m in extra payouts.
On Friday the UK’s energy regulator set the new price cap at £3,549 from October 1, marking a sharp 80 per cent rise in the cost of energy.
When asked about senior people in the energy industry receiving bonuses, Jonathan Brearley, Ofgem’s chief executive, urged them to “be thoughtful” about their pay and remuneration.
He told Good Morning Britain: “For example, the senior Ofgem team has given away any bonuses to charity because we recognise the situation that we are in right now.”
Ofgem’s annual report for 2021/22, published in July, states 910 staff received a bonus, an increase on 777 the year before.
The average bonus payment was £1,301 (down from £1,336 in 2020/21) and the total amount paid in bonuses equalled £1,184,060 (up from £1,038,277).
Two people received the largest bonus of £14,000, compared to three taking home £15,000 in 2020/21.
Of the 23 members of the Ofgem executive, only three are listed as receiving bonuses, including Mr Brearley. From his comments to GMB, it is not clear which senior members he was referring to, or which charities the money went to.
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Mr Brearley received between £260,000 and £265,000 in total renumeration from the company in 2021/22, including a bonus of £10,000-15,000. This was a marked drop from 2020/21 when the Ofgem boss received £305,000 to £310,000 in total.
Ofgem’s annual report says bonuses are based on performance levels as part of the appraisal process for the previous year.
Social media users reacted angrily to Mr Brearley’s comments, as they questioned why the energy regulator is giving out bonuses at all while the country is deep in an energy crisis.
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Twitter user Debbie Chapman wrote: “I would be able to give loads of bonus money to charity too if I was on £300,000 paid by the licences from the gas companies.
“How about they take it on the chin instead of looking for their next high end purchase. Sickening”.
“The price of energy has reached record levels driven by an aggressive economic act by the Russian state,” Mr Brearley added when speaking to Good Morning Britain hours after the price cap announcement, adding that “Ofgem has no choice but to reflect these cost increases in the price cap”.
Andrew Patterson added: “RAGING. Just heard Jonathan Brearley, head of Ofgem, say “we must all work together to deal with this”. “All”? What does he expect the consumer to do? Many won’t pay. That’s the ONLY thing “we” can do.”
Friends of the Earth’s head of policy, Mike Childs, said:“Ofgem bosses giving away their bonuses to charity is a nice gesture.
“But once we’re through this crisis – assuming the next prime minister actually does something to address it – we need an investigation into how successive governments and regulators have allowed the UK to be so exposed to external shocks.
“It’s clear that our energy market is not fit for purpose. We need to invest in cheap, home-grown renewables and energy efficiency measures such as insulation to fix our heat-leaking homes.
“Most of us don’t get bonuses and many will be facing impossible choices between eating and heating their homes this winter.”
Ofgem has been approached for comment.