Are electricity price rises paying for 'astounding' executive packages?

Guernsey Electricity then have the cheek to do a PR stunt to advise customers how to reduce their electricity bill. This beggars belief!

What makes this even worse is that Guernsey Electricity directors share £860,000 in salaries per annum, as noted in the GEP on 6 September 2024. That equates to £286,000 each. This is an astounding amount in any sane person’s eyes.

How were such salaries agreed – were the board asleep at the wheel? Maybe it’s because their own payments for being board members is linked to the pay of their executives?

Clearly the increased standing charge is going towards these vastly overpaid directors. I was the deputy chief of another States’ PLC employing over 200 staff. I was responsible for all the engineering/technical side. I retired some 20 years ago, and if you apply, pro rata, the salary that I received to the current day taking cost of living increases into account since then, my salary would be approximately £110,000 and this was in an industry far more complex than electricity, and in competition with other private companies.

Guernsey Electricity is a monopoly, it’s 100% States owned, so enjoys all the protections (and pension) of States employed staff (their conditions of employment are slightly different, as they are employed by Guernsey Electricity directly).

Their standing charge is money for old rope – they do not need to generate a penny of electricity to receive this massive income, further their unit cost (kilowatt/hour) of electricity is higher than Jersey.

Why, oh why, don’t the States publish salaries of all employees? They used to in the past – without naming individuals,

I own shares in numerous large UK companies, and I can at any time establish the salaries and bonuses of all senior staff up to and even including their boards.

The salaries of the Guernsey Electricity senior officers are beyond belief.

RON CLEAL

A Guernsey Electricity spokesman responds: Guernsey Electricity works hard to provide a secure and dependable electricity supply for all the customers it serves across the island 24/7/365. For 125 years we have been committed to meeting the needs of our community. A considerable capital investment programme is underway to support, strengthen and improve the huge range of on-island assets that we all depend upon for our electricity supply. After many years of underinvestment due to historical regulatory issues, this programme remains critical to ensure demand can continue to be met safely and securely. Standing charges, as part of our wider cost recovery, are critical to support the investments that are required to deliver this change and reflect the way in which tariffs for electricity and other utilities are structured across the world. To help reduce the impact on customers again this year whilst maintaining the right level of investment in our assets, the company will take on further debt to part-fund this work. A recent independent audit of GEL recorded that the company was operating with a high degree of efficiency, however we ensure further improvements are continually pursued.

We are committed to supporting our customers to use energy wisely, with help and guidance available online, over the phone and through various events in the community throughout the year. The recent Powering Life for Less Show is an example of this commitment. Following the launch of our Powering Life for Less initiative in 2022, in September we opted to collaborate with a range of our community partners including charities and voluntary organisations to share money-saving tips and offer support to over 250 islanders who attended.

By adopting the changes promoted at the event, the average customer could save up to £89 a year off their electricity bill. Regarding the concern raised around directors’ salaries, the figure quoted appears to be from the 2022-23 GEL annual report and accounts.

This figure is the combined cost of the executive and non-executive directors making up the GEL board, and not simply the costs of the executive directors. It also includes non-salary elements such as pension costs.

The annual report highlights that the board ensures the level of remuneration for the executive directors does not exceed that which is sufficient to attract, retain and motivate directors of the quality required to run the company successfully.

In common with many commercial businesses, a proportion of this remuneration is structured to link to the delivery of corporate and individual performance targets. A recently-commissioned review to benchmark executive director remuneration packages by an independent third-party expert found that salaries were determined to be paid within their respective market ranges whereas the bonus arrangements for these directors were advised to be below typical market practice. Thank you for the opportunity to respond.