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.
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 recently prohibited from paying bonuses after a serious sewage leak in the New Forest. The company insists the LTIP payment is not a bonus and complies with regulations.
Campaigners have criticised the move. Feargal Sharkey, the former singer turned water activist, called it a “blatant attempt to get around the bonus ban.” Gary Carter of the GMB union described the pay as “abhorrent” given the hosepipe ban and high levels of water leaks. Southern Water says the CEO received no bonus this year and that the LTIP is funded by shareholders, not customers.
The company, which serves Kent, Sussex, Hampshire and the Isle of Wight, recently asked shareholders for £1.2 billion to avoid a licence breach due to unsustainable debts. It has also been allowed a 53% bill increase for customers, the largest in England and Wales, and is appealing for further rises.
