--- title: "Executive pay, the bonus ban and board fees" language: en canonical: https://dossiertwist.com/dossiers/southern-water-services-limited/executive-pay/ as_of: 2026-10-17 keywords: ["Southern Water Services Limited","Southern Water","02366670","water and wastewater company","South East England","Greensands Holdings","Macquarie Asset Management","Macquarie Super Core Infrastructure Fund","Asterion Industrial Partners","Sandstone Water Holdings","Ofwat","Environment Agency","Drinking Water Inspectorate","sewage discharges","2025 recapitalisation","SWS Scheme","Greensands (UK) Limited administration","ownership history","board of directors","AMP8 frameworks"] --- # Executive pay, the bonus ban and board fees **Question.** What were Southern Water's directors paid, how did Ofwat's bonus ban apply to them, and what does the record show about the chief executive's long-term incentive payment? **Answer.** The audited single figure of Southern Water's chief executive, Lawrence Gosden, was £1,378.3 thousand for 2024–25, including £691.2 thousand under the long-term incentive plan, and £736.4 thousand for 2025–26; the chief financial officer's was £986.7 thousand and £483.1 thousand. Neither received an annual bonus in either year: Ofwat's Performance Related Pay Prohibition Rule applied for 2024–25 and again for 2025–26, when the company says a Category 1 pollution incident at Florence Farm in September 2025 triggered it, so that bonuses the report calculates at £396,475 and £388,622 for the chief executive were not paid. In July 2025, according to a press report, ten Kent MPs asked him to decline the £691,200 incentive payment; the company said the plan was paid by shareholders and, according to the report, that "his bonus up to the end of March" would be paid in full because it was agreed before the ban. The 2025–26 remuneration report records the amount in his 2024–25 single figure and mentions no decline or waiver, but the record does not show whether or when it was paid out. The base non-executive director fee was £55,000 in 2025–26 and the Chair's fee £290,000; from 1 April 2026 the base fee is £60,000. ## Executive directors' single figures - Analysis: The audited single-figure table in Southern Water's directors' remuneration report for 2025–26 gives the Chief Executive Officer's total remuneration for 2024–25 as £1,378.3 thousand: base salary £500.6 thousand, benefits £111.4 thousand, pension £75.1 thousand, no annual bonus and £691.2 thousand under the long-term incentive plan (LTIP), for details of which the report refers to the previous year's report. For 2025–26 it gives £736.4 thousand: base salary £518.2 thousand, benefits £140.5 thousand (a housing allowance, a car allowance and private medical insurance) and pension £77.7 thousand, with no bonus and no LTIP amount. In the retained copy of the report the 2025–26 row is detached from its labels; it is matched to the Chief Executive Officer by the report's fixed-pay table, which gives for 2025–26 a base salary of £518,162, benefits of £140,548 and pension of £77,724, total fixed pay £736,434. The report's board pages identify Lawrence Gosden as Chief Executive Officer, a post he has held since 1 July 2022. [src-059] - Analysis: For the Chief Financial Officer, Stuart Ledger, in post since January 2023, the same table gives £986.7 thousand for 2024–25 — base salary £386.9 thousand, benefits £22.9 thousand, pension £42.6 thousand, no annual bonus and £534.2 thousand under the LTIP — and £483.1 thousand for 2025–26: base salary £400.5 thousand, benefits £38.5 thousand (a car, a mobility allowance, private medical insurance and a one-off payment for accrued annual leave) and pension £44.1 thousand, with no bonus and no LTIP amount. As for the Chief Executive Officer, the 2025–26 row is matched to the Chief Financial Officer by the fixed-pay table: base salary £400,496, benefits £38,533, pension £44,055, total fixed pay £483,084. [src-059] ## The ban on performance-related pay - Analysis: The 2025–26 remuneration report states that, for the second consecutive year, no annual bonus was payable to either executive director — the Chief Executive Officer, Lawrence Gosden, and the Chief Financial Officer, Stuart Ledger — under Ofwat's Performance Related Pay Prohibition Rule (PRPP Rule), the prohibition for 2025–26 having been triggered, the report says, by a Category 1 pollution incident at Florence Farm in September 2025. According to the report, the bonus outcome would otherwise have meant payments for 2025–26 of £388,622 to the Chief Executive Officer and £240,298 to the Chief Financial Officer; the equivalent amounts foregone for 2024–25 were £396,475 and £335,442 respectively. These amounts are the report's calculation of what the bonus plan would have paid; they were not paid or received. [src-059] - Analysis: Ofwat reported on 5 November 2025 that Southern Water was one of six water companies that triggered its new rule prohibiting directors' performance-related pay for 2024/25 — a rule introduced in June 2025 under powers in the Water (Special Measures) Act 2025 — and that all six complied by not giving their directors an annual bonus or other relevant performance-related pay. Ofwat gave the triggering reasons for the six companies only collectively ("a variety of performance failures, mostly involving category 1 pollution incidents") and did not say which standard Southern Water triggered. [src-115] ## The 2025 dispute over the incentive payment - Analysis: According to a press report of 23 July 2025, ten Labour MPs representing Kent constituencies signed a letter asking Lawrence Gosden, Southern Water's chief executive, to decline a long-term incentive payment of £691,200 (reported as about £700,000), which they called 'disgraceful' and described as an attempt by the company's executives to circumvent the bonus ban. The report said he received the payment on top of a £500,000 annual salary, weeks before a new law outlawed such payments, although it says elsewhere that the £691,200 would be received over the next two years. It added that Steve Reed, whom it described as energy secretary, had called the payment 'outrageous', although it was legal under the framework in place when it was granted. These are the press report's accounts of the MPs' letter and the minister's remark. A Southern Water spokesperson was quoted as saying that executive salaries and benefits are decided by the Remuneration Committee, with a majority of independent non-executive directors, following Ofwat's protocols and the law and reviewed by external consultants; that Mr Gosden's 2025 package includes a relocation allowance and a Long Term Incentive Plan paid by shareholders, reflecting improvements made under the company's Turnaround Plan; and that both payments represent common industry practice. The amount corresponds to the £691.2 thousand LTIP figure in the chief executive's audited 2024–25 single figure in the company's 2025–26 remuneration report, whose committee chair's statement is dated 15 July 2026; that report mentions no decline or waiver of the payment. The record contains no statement by Mr Gosden on the MPs' request and does not show whether or when the amount was paid out. [src-088] [src-059] - Analysis: The same press report said that Ofwat had announced that Southern Water was one of six companies forbidden from paying senior executives traditional bonuses for failing to meet high standards, and that this rule, in force since June 2025, prevented Mr Gosden from receiving a further £396,475; it put his total remuneration package at £1.4 million, including £111,400 of benefits and £75,100 of pension-related benefits. According to the report, the company said that "his bonus up to the end of March" would be paid in full because it was agreed before the ban was introduced, and that it would be funded by shareholders; the report does not say which payment that phrase refers to. These are the press report's accounts. The £396,475 equals the 2024–25 bonus that the company's 2025–26 remuneration report records as foregone by the Chief Executive Officer under the PRPP Rule, and on 5 November 2025 Ofwat reported that all six companies, Southern Water among them, had complied with the rule for 2024–25 by not giving their directors an annual bonus or other relevant performance-related pay. [src-088] [src-059] [src-115] ## Salaries and incentives from 2025 - Analysis: The remuneration report states that from 1 April 2026 the Chief Executive Officer's base salary rose from £518,162 to £536,298 and the Chief Financial Officer's from £400,496 to £414,513, increases of 3.5% equal to the wider workforce award. The Chief Executive Officer's pension of 15% of salary reflects a contractual commitment from his appointment, and the maximum annual bonus opportunity for executive directors remains 150% of salary. A new Long-Term Incentive Plan for the executive directors and a small number of executives runs over the 2025–30 investment period from 1 April 2025, with a maximum opportunity of 150% of salary per year. Awards vest in years two to five, the first element vesting in July 2027 with payment deferred to July 2028, and are subject to the PRPP Rule. According to the report, no element of the award is recoverable from customers or funded through customer bills, the plan being funded by shareholders. [src-059] ## The Remuneration Committee and non-executive fees - Analysis: During 2025–26, the remuneration report states, the Remuneration Committee comprised three non-executive directors: Christèle Delbé, its chair, and Malcolm Cooper, both independent, and Will Price, an investor-nominated director. It met five times and took independent advice from a remuneration consultancy. The base non-executive director fee in 2025–26 was £55,000, with supplements paid to Malcolm Cooper as Audit Committee chair (£15,000) and as Senior Independent Non-Executive Director from 1 April 2025 (£10,000), to Neil McArthur as chair of the Health, Safety and Operational Risk Committee from 1 October 2024 (£10,000) and to Christèle Delbé as Remuneration Committee chair from 1 December 2024 (£10,000). With effect from 1 April 2026 the board approved a base fee of £60,000, supplements of £15,000 for each committee chair (including the Major Projects and WRMP Committee) and for the senior independent director, and an increase in the Chair's fee from £290,000 to £300,000 from the appointment of the incoming Chair. [src-059] - Analysis: The audited table of non-executive directors' fees, set out below, gives fees plus other amounts — taxable expenses connected with board business — in thousands of pounds. For 2025–26 it gives the Chair, Keith Lough, 290.0 in fees plus 2.2, a total of 292.2, against 307.5 in 2024–25. Steve Fraser's 37.9 is pro-rated to his resignation on 8 December 2025. Will Price, an investor-nominated director, receives no fees from the company. The report states that none of the directors had disclosable interests and that no payments were made to directors by other group companies. [src-059] ## Sources - [src-059] Company statement source · src-059 - [src-115] Ofwat: New bonus rule blocks £4m in first year of operation, Ofwat, 2025-11-05 - [src-088] Media source · src-088