Southern Water has been banned from paying bonuses to its top bosses under new rules that come into force last week.
The company, which manages Crowborough’s waste and drainage, is one of six water companies who have been told that they cannot issue bonuses for the financial year 2024/25, which concluded in April.
New Govt rules
They have all been banned under new Govt rules which prevent bonuses from being paid if a water company does not meet environmental or consumer standards, does not meet financial resilience requirements, or is convicted of a criminal offence.
According to the Department for Environment, Food and Rural Affairs, more than £112 million in bonuses and incentives have been handed out by water firms in the last ten years.
Under the new rules, Southern Water will not be able to pay bonuses to the chief executive or chief financial officer, for the 24/25 financial year.
Record fine
In 2021, Southern Water received a record £90 million fine after pleading guilty to thousands of illegal sewage discharges which polluted rivers and the sea in Kent, Hampshire, and Sussex. The offences were found to be caused by deliberate failings, causing major harm to protected areas, conservation sites, and oyster beds.
During the trial, the court were told Southern Water deliberately presented a misleading picture of compliance to the Environment Agency, with the judge saying that Southern Water had shown “a shocking and wholesale disregard for the environment, for the precious and delicate ecosystems along the North Kent and Solent coastlines, for human health, and for the fisheries and other legitimate businesses that depend on the vitality of the coastal waters.”
Bonuses
Despite the record fine, that year the company’s CEO received a bonus of £183,600, as part of a total pay package of £764,000, up from £428,000 the previous year.
The company also raised customer bills by an average of 47% on 1 April 2025 saying it needed the money for infrastructure improvements and insisting that bills had been kept artificially low for too long.
A Southern Water spokesperson said: “We note the government’s announcement, and await full details of how this will impact our existing approach to performance-related reward – this is already closely tied to the delivery of improvements in customer satisfaction and environmental performance.
“Any bonuses are paid by shareholders, not customers, and are overseen by an independent committee.”