England’s highly paid water bosses are raking it in with lucrative second jobs | Water

Some of England’s highest-paid water company bosses earn tens of thousands of pounds in second-tier board jobs, advising on other top executives’ pay deals.

Five of the chief executives of England’s nine water and sewerage companies also work as non-executive directors at other companies, sitting on remuneration committees.

Campaigners say it is inappropriate for water bosses to help set salaries and bonuses for senior executives at other companies.

Nicola Shaw, who was appointed head of Yorkshire Water in May, also sits on the board of International Airlines Group (IAG), which owns British Airways. She sits on its pay and safety committees, earning €123,000 (£115,000) last year.

Yorkshire Water said over the weekend that Shaw’s second boardroom role did not affect its commitment to improving water services.

Susan Davy, boss of Pennon Group, owner of South West Water, which was dumping sewage and stormwater into the seas around Devon and Cornwall last week, sits on the board of data management company Restore plc. She was paid £53,000 by the company last year, serving on a compensation committee.

A Liberal Democrat analysis found last week that the average total salary of a water company boss rose 20% in 2021, despite most companies failing to meet wastewater pollution targets. The party said the wage packages were a “national scandal”.

Andy Prendergast, national secretary of the GMB union, which has criticized the level of pay and bonuses given to water bosses, said: ‘This country is facing a water crisis and the fact that fortunes paid for deal with it have enough time to work in the moonlight. in a second job is beyond comprehension.

“In an era of garden hose bans and sewage discharges, we deserve those on high salaries to dedicate their time to fixing it. The fact that their supporting roles largely involve massive pay raises for other bosses is outrageous.

The performance of water companies has come under increasing scrutiny as drought has been declared across large swaths of the country. The Environment Agency reported in July that “the environmental performance of England’s nine water and sewerage companies was the worst we have seen in years”.

Swimmers have been warned of sewage and storm water pouring onto beaches last week, mainly on the south coast. A Labor Party analysis found that water companies have spent more than 9 million hours discharging raw sewage and stormwater into the country’s rivers and seas since 2016.

Other water bosses with non-executive roles include Thames Water boss Sarah Bentley, who was paid more than £2million last year. She is a non-executive director of Lloyds Bank, serving on the remuneration committee. Thames Water and Lloyds Bank refused a request from the Observer last week to disclose all fees paid to him.

Heidi Mottram, who earns £648,000 a year as boss of Northumbrian Water, is a non-executive director at energy company Centrica, where she was paid £93,000 last year. She sits on three committees, including the compensation committee.

Steve Mogford, who was paid £3.2m last year as boss of north-west water company United Utilities, started this month as the company’s non-executive director Qinetiq defense. Mogford, a former senior executive at defense giant BAE Systems, sits on four committees, including the compensation committee.

Luke Hildyard, executive director of the High Pay Centre, a think tank that studies issues related to executive compensation and corporate governance, said: “Most people would be amazed if they realized that the levels remuneration of general managers are set by committees made up of other general managers and persons occupying similar positions.

Beachgoers at Swanage, named on the Wessex Water website as one of the beaches where sewage was dumped on August 17. Photography: Finnbarr Webster/Getty Images

“The rationale for paying such large salaries to CEOs is that they do such important and demanding work. This is undermined if they have time to serve on the boards of other large corporations.

On Monday, the High Pay Center will launch its annual review of executive compensation at major companies across the country. It calls for greater representation of a company’s employees on remuneration committees.

It is not uncommon for business leaders to take on non-executive roles and employers say this can provide new perspectives for senior executives. However, there may be concerns about the level of commitment required.

In February 2015, Liv Garfield, chief executive of Severn Trent, announced that she was stepping down as a non-executive director of Tesco. She said she wanted to “focus fully” on her role as chief executive of the water company.

Water companies said last week that other jobs held by their CEOs were properly disclosed.

A Thames Water spokesperson said: “Sarah Bentley’s role as non-executive director is in the public domain. The insight and perspective she brings from her role at Lloyds, given their turnaround, is invaluable to her role at Thames Water and was endorsed by our Board when she joined in 2020.”

Yorkshire Water said Nicola Shaw’s work at IAG had no “impact on her role” at the water company. A spokesperson said: “In fact, as with many other executive directors who hold similar positions, the role brings back knowledge and experience from other industries that we can learn from.”

None of the water companies responded to a request to provide the hours their chief executives worked each month on their other board roles.

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