Severn Trent's CEO Reward Plan: A Case of Rich Getting Richer Amid Public Outrage
Severn Trent, a FTSE 100 water company, has faced criticism for its decision to double the CEO's reward plan to £3.1 million, despite public anger over excessive CEO pay in the water industry. This move comes as the company faces scrutiny for its environmental performance and CEO pay, with James Jesic's potential earnings significantly surpassing his predecessor, Liv Garfield's, peak annual earnings of £3.9 million in 2022.
The company's long-term incentive plan (LTIP) has been increased from 200% to 400% of Jesic's base salary, allowing him to earn up to £4.8 million in a single year. This includes salary, annual bonus, LTIP, and benefits, such as an electric car and a green travel allowance. The LTIP is a significant factor in this calculation, as it represents a substantial portion of the CEO's total compensation.
The public's reaction to this news has been one of outrage, especially given the company's poor environmental record. In 2025, Severn Trent recorded around 36,000 sewage spills lasting over 200,000 hours, which has led to intense scrutiny of water company pay. Liv Garfield, Jesic's predecessor, was one of the bosses blocked from receiving bonuses for the financial year to March due to environmental failures.
Severn Trent's decision to remove an environmental performance measure from the criteria determining future bonuses is seen as a concerning move. The company argues that this measure could be heavily influenced by factors outside management's control, but critics argue that it is a way to avoid accountability for environmental failures. The replacement of this measure with a customer service metric is seen as a step towards prioritizing customer satisfaction over environmental performance.
The company's spokesperson defended the remuneration policy, stating that it follows the letter and spirit of Ofwat's rules and is focused on delivering long-term value for customers, communities, and environmental performance. However, the public's perception of the policy is one of greed and a lack of accountability, especially given the company's poor environmental record.
This case highlights the ongoing debate surrounding CEO pay and the need for transparency and accountability in the water industry. As the public calls for more ethical and sustainable practices, companies like Severn Trent must address these concerns and demonstrate their commitment to environmental responsibility and fair compensation for their leaders.
