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Severn Trent has awarded its chief executive a total pay package of £3.2m, including a £584,000 bonus, just months after the water company was fined £2m for water pollution. water.
Liv Garfield, CEO of FTSE 100 listed companies Severn Trento, which provides sewer and water services to 4.6 million homes and businesses in England, saw its total pay rise 2.1 percent from last year, according to the annual report published Tuesday. This was despite Garfield’s bonus being reduced due to the fine.
The industry is under intense scrutiny over the unknown quantities of wastewater being dumped into rivers and coastal waters, which will be a critical issue during the general elections next month. The Conservatives, Labor and Liberal Democrats have discussed restricting water companies’ bonuses in cases of serious wastewater pollution.
The pay concessions come as water companies ask customers to pay steep increases in bills, with a draft decision from regulator Ofwat expected in July. Severn Trent has proposed a 36 per cent rise in bills to £546 a year per household, excluding inflation, by 2030.
Susan Davy, chief executive of FTSE-listed Pennon, which owns South West Water, said on Monday she had given up her annual bonus which would have been worth £237,000. Davy’s salary rose to £860,000, up from £543,000 in 2022-23, as she earned a long-term performance award that would be held for two years and reinvested in Pennon shares.
Pennon was already under fire for paying a £127m dividend to shareholders, days after an outbreak of parasites in drinking water in Devon.
Severn Trent said Garfield had his bonus reduced due to the £2m fine received for pollution in February. This allowed huge quantities of raw sewage to flow into the River Trent, near Stoke, between 2019 and February 2020.
Around 260 million liters of this amount (the equivalent of 10 Olympic swimming pools) was dumped illegally and in violation of permits.
An Environment Agency investigation found that a pump at the Strongford sewage treatment plant, near Stoke-on-Trent, had been broken for 52 days before the incident.
Severn Trent said Garfield’s bonus was justified as the company had met “operational targets for customers” and achieved a “4-star rating from the Environment Agency for the fourth year in a row”.
“Slightly less than three-quarters of executive compensation is directly linked to performance, with ambitious goals,” the company added.
Although water companies have been required to install electronic monitors in combined wastewater drain pipes since last year, they measure the frequency, but not the duration, of spills.
There is also an additional 7,000 emergency pipeswhich are intended to operate only in urgent circumstances, such as power outages, which do not yet have monitors, but will need to install them by 2030.