Birmingham MP Preet Kaur Gill has called on Severn Trent Water to reconsider plans to increase the chief executive's bonus, arguing the move is inappropriate given the company's performance on sewage discharges and customer bills.
MP's Concerns Over Bonus Plans
Gill, the Labour MP for Birmingham Edgbaston, wrote to Severn Trent's chair, Christine Hodgson, expressing dismay at reports that the company is considering raising the CEO's maximum bonus from 200% to 250% of salary. The current CEO, Liv Garfield, earned £1.5 million in total pay last year, including a £900,000 bonus.
“This does not feel appropriate when families in Birmingham are struggling with their bills and when Severn Trent continues to discharge untreated sewage into our rivers and waterways,” Gill said in her letter.
Customer Backlash and Environmental Record
Severn Trent has faced widespread criticism for sewage spills and rising water bills. The company reported 60,000 sewage spills in 2023, a 20% increase from the previous year. Meanwhile, average household bills have risen by 7% to £429 per year.
Gill highlighted that many constituents are struggling financially. “People in my constituency are facing a cost-of-living crisis. Water bills are going up, and they see sewage in their rivers. It is tone-deaf to reward executives with even larger bonuses,” she added.
Severn Trent's Defense
A Severn Trent spokesperson defended the bonus proposal, stating that executive pay is linked to performance on customer service, environmental targets, and financial efficiency. “Our executive remuneration is designed to reward strong performance that benefits customers and the environment. We have invested £1.3 billion in improving our network and reducing sewage spills,” the spokesperson said.
The company noted that CEO Liv Garfield has led the company through significant investment and that bonuses are only paid if targets are met.
Political and Public Pressure
Gill's intervention adds to growing political pressure on water companies. Labour has pledged to crack down on executive bonuses and sewage dumping if elected. The party would give regulators powers to block bonuses at companies that fail environmental standards.
“The government should step in and stop this. Water companies are failing the public, and they should not be rewarding failure,” Gill said.
What Happens Next
Severn Trent's board is expected to vote on the bonus increase at its annual general meeting in July. Shareholders have expressed mixed views, with some supporting the link to performance and others calling for restraint.
Gill has requested a meeting with Severn Trent's chair to discuss the issue further. “I hope they will listen to customers and rethink this decision. It is the right thing to do,” she concluded.
