Southern Water boss £1.4million pay package branded 'outrageous' by Cabinet minister

Southern Water chief's pay package of almost £1.4million has been branded "outrageous" by the Environment Secretary.

Steve Reed warned the company had not performed well enough to justify the hike - with trust between water firms and customers already at an all-time low. The chief executive Lawrence Gosden pay package, including benefits and incentive plans, reached almost £1.4million 2024-25.

The company's accounts show Mr Gosden received around £762,000 the year before meaning his package had almost doubled. His base salary for the current financial year stands at £518,000 - a 3.5% hike on last year - with details yet to be disclosed on any incentives.

"It's outrageous in my opinion," Mr Reed told the BBC's Sunday with Laura Kuenssberg. "They are a private company and they can take their own decisions about pay. But I would really would implore them to think about how this looks to their customers.

He said: "Trust between the water companies and their customers is at the lowest point probably ever. By paying their senior executives raises of that kind, what message are they sending to their customers?"

Pressed on whether the chief executive should turn down the pay hike, he replied: "I think it would be right if he did. It's a matter for him, not a matter for the government.

He added: "I don't think Southern Water has performed well enough for that kind of pay increase to be merited."

Mr Reed also declined to express confidence in water regulator Ofwat amid reports the body faces the axe under the biggest shake-up of the sector since it was privatised. The Independent Water Commission - led by ex-Bank of England chief Sir Jon Cunliffe - will outline its recommendations on Monday to turn the sector around.

"The regulator is clearly failing," Mr Reed said. "It's failed everybody. It's failed customers, we saw those huge bill rises. It's failed the environment, we see the state of iconic lakes like Windermere, beaches like the beach at Bournemouth.

"I've been up and down this country and spoken to wild swimmers, parents, everybody furious about the state of our water.

"So clearly, regulation must change. Precisely how it changes, Sir Jon (Cunliffe) will make his recommendations tomorrow. I will respond."

Southern Water told The Guardian earlier this week: "Our CEO received no bonus this year, in line with the new Ofwat rule. He was paid part of a long-term incentive scheme linked to our turnaround that dates from early 2023.

"That’s funded not by customers, but by our shareholders. We made record investments of £977m last year, which helped to deliver a successful turnaround plan including reducing leaks by more than 15%.”