The Environment Secretary, Steve Reed, criticised the pay package for Lawrence Gosden, branding it “outrageous”.
According to Southern Water’s annual report, Mr Gosden, who has been at the helm since 2022, was awarded £691,000 this year as part of a long-term incentive plan.
This is in addition to his fixed pay of £687,000, bringing his total earnings to more than £1 million.
Environment Secretary told the BBC’s Sunday With Laura Kuenssberg: “Trust between the customers and the water companies is at the lowest point probably ever, and by paying their senior executives rises of that kind, what message are they sending to their customers?
“I don’t think Southern Water has performed well enough for that kind of pay increase to be merited.”
The company was banned from paying bonuses last month following a “category 1” sewage spill in the New Forest, Hampshire, in August 2024.
The company was also chastised for a huge water outage in December which left almost 60,000 homes without water, some for three days.
READ MORE: Police give update on traveller camp in New Forest
Under new rules, companies cannot pay bonuses if they fail to meet environmental, consumer, or financial standards, or if they are convicted of a criminal offence.
Southern Water maintains that the payment to Mr Gosden is not a bonus but forms part of a long-term incentive plan set up in 2023.
This is linked to a two-year effort to improve the company’s performance.
A spokesperson for Southern Water said: “Lawrence Gosden’s 2025 package includes a relocation allowance, and long-term incentive plan paid by shareholders which marks improvements made during the delivery of our turnaround plan.
“Both of these payments represent common industry practice.”
This criticism of Mr Gosden’s pay comes just ahead of the publication of an extensive review of the water industry.
The review is expected to propose major reforms to how the sector is regulated, potentially including the abolition of regulator Ofwat.
Southern Water recently had to request an additional £2.1 billion from its owner, Australian investment firm Macquarie, to bolster its struggling finances.
The company, which serves 4.7 million people across the south and southeast of England, has amassed nearly £9 billion of debt.
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