Remuneration Report

In 2009, the Remuneration Committee (the Committee) reviewed the remuneration arrangements for Executive Directors. The proposed changes for 2010 are summarised in the letter to shareholders shown on this page.

Letter to shareholders

Introduction to the Report

The Remuneration Committee

Executive Directors’ remuneration policy and framework

The total remuneration package

Non-Executive Directors

Other matters in 2009

Promotion to the Board

Chris Weston was appointed to the Board on 1 July 2009. His base salary on appointment was £500,000 per annum. His AIS is subject to 30% deferral and investment as deferred shares under DMSS. His opportunity to participate in LTIS increased on his appointment, in line with our policy. He received an LTIS award of 150% of base salary in April 2009 and a further LTIS award of 50% of salary in September 2009.

Enlargement of roles

Phil Bentley’s role as Managing Director, British Gas, broadened significantly in 2009 as the residential energy, services and business energy activities were combined into a single customer-focused retail operation. In recognition of this change he received an increase in his base salary. In addition, a commitment was made that if he remains with the Group at least until January 2012, the accrued value of his pension under CPP will be increased progressively over time.

Mark Hanafin and Nick Luff assumed responsibilities for the Company’s nuclear investments in 2009.

Other matters in 2008

Statutory disclosures

This Report on remuneration has been approved by the Board of Directors and signed on its behalf by:

Grant Dawson
General Counsel & Company Secretary
25 February 2010