Severn Trent has doubled the size of a long-term reward scheme for its new chief executive to as much as £3.1m and he could receive significantly more than his predecessor, despite anger over water bosses’ pay.
The FTSE 100 water company said its long-term incentive plan (LTIP) would increase from 200% of new chief executive James Jesic’s base salary to 400%, according to changes revealed in the company’s most recent annual report. Jesic could receive as much as £4.8m in a single year after salary, annual bonus, LTIP and benefits are counted.
Water company pay has come under intense scrutiny in recent years, amid disgust over sewage flowing into Britain’s rivers and seas. Severn Trent revealed that Jesic’s immediate predecessor, Liv Garfield, was one of the bosses blocked from receiving bonuses for the financial year to March because of environmental failures.
Severn Trent had escaped the ban the year before. It complained bitterly about the ban, saying it was not a proportional punishment because a single serious pollution incident could prevent the payment of bonuses. It said the ban – introduced by Ofwat, the regulator for English and Welsh water firms – was “undermining the ability of the sector to attract and retain the leadership capability required to deliver sustained improvement for customers and the environment.”
The utility, which serves 4.7 million customers around Bristol, the Midlands and east Wales, also removed an environmental performance measure from the criteria determining future bonuses.
Jesic started as chief executive in January on a base salary of £775,000. In the first three months of 2026 he made £740,000 in pro rata salary and bonuses that were not banned because he was not chief executive during the incidents – although he was employed in a senior role.
Severn Trent cut the size of his potential annual bonus from 120% of his salary to 100%. However, at the same time the company increased the LTIP from 200% of salary to 400%, raising the overall amount he could receive significantly, according to the annual report, published in May.
Jesic’s theoretical maximum pay packet for a single year could reach £4.8m when including the salary, bonuses, benefits such as an electric car and a £15,000 “green travel allowance”, plus pension contributions. That would be significantly more than the £3.9m peak annual earnings for Garfield in 2022.
James Wallace, the chief executive of the River Action campaign group, said: “The public will rightly question whether any chief executive should receive a multimillion-pound pay package when the company they were responsible for recorded around 36,000 sewage spills lasting more than 200,000 hours in 2025.”
Severn Trent’s bonus calculations removed reference to its score in the government’s environmental performance assessment, despite generally being considered one of the better performers on pollution among UK water companies. The company said it was justified in watering down the measure because it “could be heavily influenced by factors outside management’s control, reducing its effectiveness within the bonus structure”. It replaced it with a customer service metric, while some different environmental measures also remained.
A Severn Trent spokesperson said: “Our remuneration policy follows both the letter and the spirit of Ofwat’s rules. We have been completely open with Ofwat and our application of the rules, which apply to all our incentive programmes, is entirely compliant and is funded by shareholders and not customer bills.
“Critically, our policy is focused on delivering long term for our customers, communities and continued sector-leading environmental performance. We’re investing billions in our infrastructure at record levels and at an accelerating pace, reducing spills by 41% last year, and remain highly confident of achieving the top environmental status for a record-breaking seventh year.”
Severn Trent’s LTIP would still be subject to any future application of a bonus ban to the company. However, other companies have been accused of trying to skirt the ban. United Utilities, which serves north-west England, has faced criticism for awarding its chief executive, Louise Beardmore, a £435,000 “allowance” with no performance conditions.
A United Utilities spokesperson said the company was “committed to paying competitive, market-based remuneration to all our employees”, and that “increased remuneration reflects the importance of retaining and rewarding our leadership team after a year of strong performance”.
