Several Kent MPs have signed a letter demanding the boss of Southern Water return his “disgraceful” £700,000 performance-linked payout.
Lawrence Gosden, chief executive of the under-fire firm, received the bonus on top of his £500,000 annual salary just weeks before a new law outlawed the payments.
Southern Water has been repeatedly criticised for rising bills for customers while at the same time overseeing sewage dumps and water outages across its network in Kent, Sussex, Hampshire and the Isle of Wight.
All the Labour MPs representing Southern Water customers in Kent – which is responsible for treating wastewater across the county and also supplying homes in Thanet, Medway, Gravesend, Sheppey and Dartford – have written to Mr Gosden.
The letter was penned by East Thanet MP Polly Billington and her colleague for Hastings and Rye, Helen Dollimore, and signed by Labour MPs across the Southern Water catchment.
They are urging him to “do the right thing and decline this disgraceful payment for failure”.
At the weekend, the energy secretary Steve Reed called the payment “outrageous”, despite being legal at the time it was agreed under the framework in place at the time it was granted.
It comes after details emerged that Mr Gosden would receive the additional £691,200 over the next two years referred to as a “long-term incentive” after overseeing the business’s “turnaround plan” up to the end of March.
Southern Water documents reveal his total remuneration package is worth £1.4 million after he also received payments of £111,400 worth of benefits and £75,100 of pension-related benefits.
The government’s water regulator, Ofwat, has announced Southern Water is one of six companies forbidden from paying senior executives traditional bonuses for failing to meet high standards.
This new rule, which came into effect in June, prevented Mr Gosden from pocketing a further £396,475, but the company says his bonus up to the end of March will be paid in full as it was agreed before the ban was brought in and will be funded by shareholders.
The letter from MPs to Mr Gosden said: “We do not believe this massive payout is justified and would urge you in good conscience to decline it.
“In our manifesto, Labour promised to ban underserved and excessive bonuses to water bosses who did not deliver for their customers.
“We strongly welcome that earlier this year the government’s Water (Special Measures) Act came into force and Southern Water was one such company made subject to that ban.”
The MPs added Mr Gosden’s “tenure has also seen water outages for tens of thousands of households, major flooding in Hastings that saw people evacuated and businesses destroyed and sewage spilled regularly across the south east”.
It comes after “eye-watering bill hikes” of 46.7% for some of those constituents to “clean up the mess Southern Water has made”.
The MPs add: “Customers will be shocked that while they are being asked to pay more, you will be laughing all the way to the bank.
“We are appalled at this enormous ‘incentive payment’, which we believe constitutes a shameful and blatant attempt by Southern Water executives to circumvent the bonus ban and enrich themselves without any justification beyond pure greed.
“Our constituents will be asking themselves why the chief executive of Southern Water would need to be ‘incentivised’ to care about fixing the dire performance of his own company.
“We urge you to do the right thing and decline this disgraceful payment for failure.”
The letter was signed by Labour’s 10 Kent MPs – Polly Billington (East Thanet), Jim Dickson (Dartford), Lauren Edwards (Rochester and Strood), Naushabah Khan (Gillingham and Rainham), Kevin McKenna (Sittingbourne and Sheppey), Tris Osborne (Chatham and Aylesford), Sojan Joseph (Ashford), Lauren Sullivan (Gravesham), Mike Tapp (Dover and Deal) and Tony Vaughan (Folkestone and Hythe).
For the eighth consecutive year, Southern Water says no dividends were paid to external shareholders – with no plans to make any dividend payments until 2030 at the earliest.
The company has defended the pay policy.
A Southern Water spokesperson previously said: “Chief executive and chief finance officer salaries and benefits are decided by the Remuneration Committee, with a majority membership of independent non-executive directors, and following protocols and rules set out by Ofwat and in accordance with the law.
“Their decision is reviewed by external remuneration consultants who bring sectoral and wider business experience as well as remuneration expertise.
“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.
‘We urge you to do the right thing and decline this disgraceful payment for failure…’
“Both of these payments represent common industry practice.”
The two-year turnaround plan was designed to deliver “a short sharp boost in performance” after being plagued with complaints over sewage leaks and dumping.
A new 24/7 Control Centre now coordinates activity across the Southern Water network, using data from 32,000 digital sewer monitors.
Southern Water bosses say this has been the driving force behind total pollution figures dropping by more than 30% during the Turnaround Plan period.
The firm also says it has reduced overall leakage, with an 18% fall in 2024/25.
According to the Environment Agency, Southern Water was responsible for 15 pollution incidents considered to pose “serious or persistent” harm to fisheries, drinking water and human health last year.
In April, bosses pleaded guilty in court to 13 counts relating to untreated sewage spills on the Kent coast.
The Environment Agency brought the prosecution, which relates to unpermitted discharges from Margate and Broadstairs wastewater pumping stations, committed between July 2019 and December 2021.
The company has not yet been sentenced.
