Multimillion pound payoffs and golden hellos at Thames Water and record pay for bosses across the water industry have been variously condemned as eyewatering, obscene and a national scandal.
Only months after the privatised water sector was vigorously lobbying against Labour’s general election pledge to bring the industry back into public ownership, this summer’s annual filings show record amounts paid to private sector bosses.
Last week it emerged that Steve Robertson, 62, the former boss of Thames Water who left the company last year, received a £2.8 million pay-off. It included a £2 million ex-gratia payment because he had not received any bonuses during his three-year tenure due to the company’s chronic failures on leaks!
That news follows revelations in The Times of the bonanza promised to his successor, the most generous package ever offered in the sector. Sarah Bentley, 48, who was poached from Severn Trent, has been hired on the promise of a £12 million three-year deal including a £3 million “golden hello” in compensation for loss of bonuses at her former employer.
Liv Garfield, 44, the chief executive of Severn Trent, was paid £2.7 million last year, a rise of 10 per cent, including £1.8 million in bonuses.
Steve Mogford, 64, chief executive of United Utilities, the north west England supplier, was paid £2.5 million, a rise of 5 per cent, of which nearly £1.6 million were bonuses, presumably for the regular appearance of raw sewage in some streets in Burscough?
Chris Loughlin, 67, the chief executive of the South West Water group Pennon, had a pay rise of 60 per cent, taking his earnings to £2.1 million, of which £1.4 million was in bonuses.
The bumper payouts coincided with a scathing report by the Commons public accounts committee, which said that the private sector’s stewardship of the nation’s water supplies and the rate of leakage, 3 billion litres a day or 20 per cent of the country’s daily usage, had left the UK within 20 years of running out of water.
Michael Gove, the Cabinet Office minister, previously said that water bosses’ high pay was helping to make the argument for nationalisation. Rachel Fletcher, the chief executive of Ofwat, the regulator, has said that pay levels have “damaged customer trust”.
Luke Pollard, the shadow environment secretary, said “When millions of litres of water are being lost in leaks every week, water company bosses should not be pocketing huge bonuses and inflated pay. Over lockdown, more people spent time at their homes so water bosses know people will be paying more in [metered] water bills. Bumper bonuses are a national scandal when so many households are struggling to afford rising bills.”
Mike Keil, policy head at the Consumer Council for Water, said “Customers will find some of these eye-watering payments hard to swallow especially where executives appear to be rewarded for poor performance”.
Severn Trent argued that on a wide definition, 67 per cent of Ms Garfield’s bonus was related to customer services. United Utilities said that less than 50 per cent of Mr Mogford’s bonus was customer service-related. Pennon said that less than 10 per cent of Mr Loughlin’s bonus was based on customer service measures.