Southern Water has nearly doubled its chief executive’s annual pay package to £1.4 million, despite financial difficulties and a government ban on bonuses. Lawrence Gosden received £691,000 under a two-year long-term incentive plan (LTIP) on top of fixed pay of £687,000, according to the company’s annual report. In the previous financial year, his total pay was £764,000, including a £184,000 bonus.
The pay rise comes amid intense scrutiny of water companies over sewage leaks. The Labour government banned bonuses for executives at firms that break the law, and Southern Water was banned from paying bonuses last month after a serious sewage leak in the New Forest. The company insists the LTIP payment is not a bonus and complies with regulations.
Feargal Sharkey, a water campaigner, criticised the move, saying it was a blatant attempt to circumvent the bonus ban. Gary Carter of the GMB union called the pay rise “abhorrent” given the hosepipe ban and high levels of leaks. A Southern Water spokesperson said the CEO received no bonus this year and that the LTIP was linked to a turnaround plan funded by shareholders, not customers.
Southern Water recently asked shareholders for £1.2 billion to avoid breaching its licence due to unsustainable debts. The company has also been allowed a 53% bill increase for its 4.7 million customers, the largest in England and Wales, and is appealing for further rises. Gosden’s benefits package, including relocation allowance and private healthcare, nearly quadrupled to £111,000.
