Southern Water practically doubles CEO pay to £1.4m regardless of bonus ban | Water business

[ad_1] Southern Water has practically doubled its chief government’s annual pay package deal to £1.4m, regardless of monetary difficulties and a authorities ban on it awarding bonuses.

Lawrence Gosden was awarded £691,000 beneath a “two-year long-term incentive plan” (LTIP), on high of fastened pay of £687,000 in its final monetary 12 months, in accordance with the corporate’s annual report, revealed this week.

Water firms have been beneath intense scrutiny in recent times amid widespread outrage over sewage leaks into Britain’s rivers and seas. The Labour authorities sought to handle a few of that anger by way of a ban on bonuses for high executives at water firms who broke the legislation.

Southern Water was final month banned from paying bonuses with fast impact, after a sewage leak in August 2024 within the New Forest in Hampshire that fell into probably the most critical class. Southern stated that the additional LTIP pay was not a bonus, and that it complied with the legislation and with guidelines set by Ofwat, the water regulator.

The rise to Gosden’s pay package deal is prone to show controversial, because it emerged weeks after Southern Water was compelled to ask shareholders, led by Macquarie, for £1.2bn to keep away from a breach of its regulatory licence due to unsustainable money owed. Macquarie is the previous proprietor of Thames Water, whose debt pile has led it to the snapping point into short-term nationalisation.

Southern Water, which provides Kent, Sussex, Hampshire and the Isle of Wight with water and sewage companies, this week introduced a hosepipe ban which was criticised for coming at a time when payments have risen considerably, although some consultants recommend that such bans are essential to protect water amid drought circumstances in some elements of the nation.

Southern had already been allowed a 53% invoice enhance for its 4.7 million clients to an annual common of £642 – the most important rise of any firm in England and Wales – however it's interesting to the Competitors and Markets Authority to cost extra.

Gary Carter, nationwide officer at GMB, a union which represents hundreds of water business staff, informed the Guardian: “For Southern Water’s boss to trouser greater than one million kilos after simply asserting a hosepipe ban and shedding hundreds of thousands of litres in leaks each single day is abhorrent.

“It encapsulates every little thing that’s mistaken with our damaged, privatised water system.”

A Southern spokesperson stated the corporate had a report 12 months for leak repairs. They stated: “Our CEO acquired no bonus this 12 months, in keeping with the brand new Ofwat rule. He was paid a part of a long-term incentive scheme linked to our turnaround that dates from early 2023. That’s funded not by clients, however by our shareholders. We made report investments of £977m final 12 months which helped to ship a profitable turnaround plan together with decreasing leaks by greater than 15%.”

Gosden would have acquired one other £396,000 if not for the ban on annual bonuses. The corporate’s chief monetary officer, Stuart Ledger, had been in line for a bonus of £335,000 on high of pay value £987,000.

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Southern’s remuneration committee determined to award Gosden £691,000 beneath the LTIP on 24 June, beneath a plan set in 2023. The 2-year plan is just not caught by the principles on annual bonuses, though most firms don't typically take into account a two-year interval as “long run”. It's understood that half the quantity shall be paid this 12 months.

Gosden’s pay enhance was additionally pushed by “advantages” value £111,000, practically quadruple the worth of the advantages acquired the earlier 12 months. These advantages included a relocation allowance, personal healthcare and a automobile allowance.