British Gas owner Centrica has confirmed that chief executive Iain Conn will step down next year, putting an end to a five-year tenure which has been beset by upheaval in the energy industry and a tumbling share price.
Shares in Centrica hit a 22-year low of 75p following the announcement on Tuesday.
Since Mr Conn took over the role, shares have declined in value by more than two thirds.
Mr Conn, 56, was appointed chief executive of the company in January 2015, having previously been boss of BP’s refining and marketing division between 2007 and 2014.
He had been tipped as a potential successor for BP chief executive Tony Hayward, but was beaten to the post by Bob Dudley in the aftermath of the Deepwater Horizon oil spill.
Inheriting the Centrica role from Sam Laidlaw, Mr Conn set about refocusing the business to be consumer-facing and moving away from exploration and production.
Developments have included rolling out smart home services and the announcement last year that it would divest from nuclear energy. Tuesday also saw Centrica announce that it would exit oil and gas production, completing that shift.
But he has also presided over a slump in customer numbers, with 742,000 jumping ship in 2018 alone, as challengers nip at the heels of the Big Six energy providers.
The national row over energy prices has also caused tension, while the Government’s response in the form of the energy price cap has eaten into Centrica’s profits.
Analysts largely agreed that the time was right for Mr Conn’s departure.
Neil Wilson, analyst at Markets.com, said: “It’s not been a terribly good time for the company – it’s a surprise he lasted as long as he did.”
Russ Mould, investment director at AJ Bell, said: “Utility companies are going through significant structural changes and Centrica making these bold moves is necessary. The health of its business isn’t great with declining revenue, profit and cash flow.”
Mr Conn has also attracted criticism for his pay packets, especially after the company announced it would cut 4,000 jobs last year.
Union officials welcome Mr Conn’s departure, but expressed concern at the prospect of more cost savings at the company which could lead to further job cuts.
In April it was revealed that he took home a £2.4 million pay packet last year, with a total pay rise of 44%.
Justin Bowden, GMB national secretary, said: “A couple of months after trousering a £750,000 pay rise, Iain Conn is to leave Centrica in ‘the last chance saloon’, a direct consequence of a litany of past management failures, compounded by the SVT (standard variable tariff) cap.”
Unison’s national officer for energy Matt Lay said: “Iain Conn cannot solely be blamed for the company’s present challenges, but if the business is to move forward, it is right for him to stand down.
“The company cannot continue to axe thousands of front-line staff to make savings so the cut in dividend is welcome to allow more investment for the future and strengthen the balance sheet.”
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