Water companies CEO pay: bosses earned record £10m last year despite sewage spills into UK rivers and beaches
Analysis by the Liberal Democrats found water company CEOs earned a record £10m last year despite sewage being poured into UK rivers and beaches
Chief executives of water firms have earned a record £10 million in salaries last year despite the industry still being under fire for pouring sewage into UK rivers and beaches. Financial records show that collectively water company CEO’s pay soared by £876,000 in 2022/2023 compared to 2021/2022.
Five chief executives turned down their bonuses last year due to public outrage over the amount of sewage being discharged into waterways. But a further £9.7million in bonuses were paid to water industry chief executives.
The £10 million windfall was shared between just 26 executives in England and Wales. Thames Water paid £1.52 million in salaries to its chief executives, with around half going to Sarah Bentley who dramatically resigned this summer. The rest was divided between executive chairman Ian Marchant and Alastair Cochran, the former chief financial officer.
In June contingency plans were drawn up for the potential collapse of the water company because of its huge debt pile. Emergency plans were drawn up and the month after Thames Water shareholders agreed to provide a further £750 million in funding to save the company. There was speculation that if the firm Thames failed to secure fresh funds it could have been temporarily taken over by the government until a new buyer was found, in a special administration regime (SAR).
The highest paid bosses were those at Severn Trent Water, who received £1.2 million in base pay and £3.4m in bonuses, benefits and incentives. United Utilities, the company found to have discharged the most into waterways according to the Environment Agency, paid out the most base pay to its CEOs last year - totalling £1.6 million. It also paid £2.4 million in bonuses, benefits and incentives.
United Utilities is under fire from campaigners over the state of Lake Windermere. Campaigner Matt Staniek is holding a weekly protest outside a new United Utilities information centre in Windermere to demand the water company stops “putting s***” into the lake.
Anglian Water top executives got £996,700 in base pay and £1.3 million in bonuses, benefits and incentives while Northumbrian Water also increased the amount it paid out on bonuses year-on-year.
The Liberal Democrats carried out the analysis and are calling for a ban on all CEO bonuses within the water industry. The party’s environment spokesman Tim Farron MP said “this country's water industry has become a gravy train where sewage and money flows freely” adding that it is a “scandal happening on this government's watch.”
He added: “When will Conservative Ministers finally get tough on these polluting and profiteering firms? These execs are stuffing their pockets whilst our rivers and lakes are destroyed. Frankly, the whole thing stinks. These bonuses need to be banned as long as the sewage scandal continues. Bonuses should be a reward for success, not committing environmental crimes.”
The trade body Water UK, said: “While we don't recognise the methodology, these figures from the Liberal Democrats show total CEO remuneration fell last year. In addition, no water and sewerage company in England and Wales paid a bonus out of customer money, while half of CEOs took no bonus whatsoever. This is the first time this has ever happened in the water industry and reflects the industry's recognition that the public expect better.”
A spokesperson from the Department for Environment Food and Rural Affairs said: “This government takes oversight of the water industry very seriously - which is why we have given Ofwat new powers allowing them to toughen up rules on dividends. It's also why we welcome Ofwat tightening rules on bonus payments. For 2022-23, no water companies in England are paying a CEO bonus out of customer money, and many CEOs have decided to take no bonus.'
In March the water regulator Ofwat said it will use new powers to block companies from shareholder payouts if they fail to hit performance and environmental targets. Ofwat said the changes will reduce the risks that a company’s poor financial health may pose to customer interests and its ability to invest to protect the environment.
Labour has pledged to give Ofwat powers to ban water firm bosses getting bonuses when they pump huge amounts of sewage into UK waterways. The party outlined “special measures” it will implement to end the sewage crisis which include ensuring that water bosses face personal criminal liability for extreme and persistent lawbreaking.
The measures also include introducing severe and automatic fines for illegal discharges and forcing all water companies to monitor every single water outlet. Labour’s Shadow Environment Secretary, Steve Reed MP, said “stinking sewage” is in our rivers and seas due to “13 years of Tory government”.