Southern Water has nearly doubled its chief executive Lawrence Gosden’s annual pay package to £1.4 million, despite a government ban on bonuses and ongoing financial struggles. The increase, revealed in the company’s annual report, includes £691,000 under a two-year long-term incentive plan (LTIP) on top of fixed pay of £687,000. In the previous year, Gosden received total pay of £764,000 including a £184,000 bonus.
The pay rise comes amid heightened scrutiny of water companies over sewage spills and high bills. Labour imposed a ban on bonuses for executives at firms that breach environmental laws, which Southern Water did after a serious sewage leak in the New Forest in August 2024. Southern argued the LTIP is not a bonus but part of a turnaround plan, and that it complies with Ofwat rules.
Campaigner Feargal Sharkey criticised the move, saying it was a “blatant attempt” to circumvent the bonus ban, echoing past failures with bankers. The GMB union’s Gary Carter called the pay “abhorrent” given a recent hosepipe ban and ongoing leaks. Southern Water this week announced a hosepipe ban for customers already facing a 53% bill rise to an average of £642—the highest in England and Wales—and is appealing to charge even more.
A Southern Water spokesperson stated that Gosden received no bonus this year, and the LTIP is funded by shareholders, not customers. They highlighted record investments of £977 million and a 15% reduction in leaks. However, Gosden would have received an additional £396,000 if not for the bonus ban. The company’s CFO, Stuart Ledger, was also due a £335,000 bonus on top of £987,000 pay.
The remuneration committee awarded the LTIP on 24 June, based on a plan set up in 2023. The two-year scheme is not covered by the bonus ban rules, which only apply to annual bonuses from April 2024. Gosden’s benefits also nearly quadrupled to £111,000, including relocation and car allowances—common practice, according to the company.
