SSE chief executive Alistair Phillips-Davies has seen his total remuneration fall by around 40 per cent after annual profits fell well short of expectations.

The annual report of the Scottish Hydroelectric owner shows Mr Phillips-Davies earned total remuneration of £1.656 million for the year to March 31 compared with £2.719m in the preceding year.

The fall in remuneration came after Mr Phillips-Davies failed to qualify for an award under Perth-based SSE’s Annual Incentive Plan. He qualified for an award worth £1m in the preceding year. The report noted the plan is based on performance on a range of financial and other measures including customer satisfaction.

“It is impossible to overlook the fact that SSE’s financial results for 2018/19 fell well short of what was expected at the start of the financial year, and so the [Remuneration] Committee concluded that it should exercise its discretion and make no AIP award to the three Executive Directors,” noted the chair of the committee, Sue Bruce.

Mr Phillips-Davies qualified for awards worth £390,000 under SSE’s Performance Share Plan, against £371,000 in the preceding year. The plan is intended to encourage strong share price, financial, dividend and customer performance over a three-year period.

His base salary increased to £890,000 from £864,000.

SSE plans to exit the retail business. Its British household energy supply arm lost 570,000 customers in the latest year.

The total profit made by the core businesses that SSE plans to retain fell 38% annually, to around £0.7 billion before tax and one offs in the year to March 31, from £1.2bn.

Finance director Gregor Alexander’s total remuneration fell to £1.261m in the latest year, from £1.986m.