Southern Water’s CEO faces backlash for a hefty bonus while raising bills significantly
Portsmouth: The CEO of Southern Water is in hot water. He defended his £180,000 bonus while announcing a massive 85% hike in customer bills. That’s a tough pill to swallow!
Southern Water, serving areas like Hampshire and the Isle of Wight, plans to raise bills more than any other UK water company. This comes after a major outage just before Christmas and a hefty £90 million fine for dumping raw sewage.
People are understandably upset. The CEO, Laurence Gosden, told a committee that the bill increase is due to the region’s water stress. He believes his bonus is justified because water quality has improved from the worst in the country.
Gosden mentioned he declined a bonus in his first year due to public concern. In his second year, most of the bonus was disallowed, but he did take some for improvements in water quality and safety.
He argued that the bonus scheme is tied to performance improvements. They’ve moved from the bottom to just outside the upper quartile in just one year. But many are still angry about sewage spills and the dividends paid to shareholders.
Water companies have paid out £2.5 billion in dividends while adding £8.2 billion to their debt. Gosden said they’ve faced years of flat bills, which means they need to invest heavily in water resources.
Starting in April, the average bill rise for England and Wales will be about £31 a year. Mike Keil from the Consumer Council for Water said companies need to be more aware of public sentiment regarding pay and bonuses.
He warned that rising bills could push a million households into water poverty. Water UK’s chief executive noted that poor performance stems from insufficient funds to tackle climate change and increased demand.
