The FTSE 100 water utility Severn Trent has announced a significant boost to its Chief Executive James Jesic's long-term reward scheme, doubling it to a maximum of £3.1 million. This substantial increase is outlined in the company's latest annual report and means Mr. Jesic could potentially receive an annual remuneration package worth up to £4.8 million, surpassing his predecessor Liv Garfield's peak earnings.
This decision comes amidst growing public and regulatory scrutiny of executive compensation within the UK water industry, driven by widespread dissatisfaction with sewage discharges into Britain's waterways and seas. Notably, Mr. Jesic's immediate predecessor, Liv Garfield, was among several water bosses whose bonuses were blocked for the financial year ending March due to environmental failures. Severn Trent had narrowly avoided a similar ban in 2025, but argued that Ofwat's sanctions were disproportionate.
The company's annual report reveals that while Mr. Jesic's potential annual bonus has been reduced from 120% to 100% of his £775,000 base salary, the significant increase in the LTIP from 200% to 400% of his salary significantly boosts his overall potential earnings. In his first three months as CEO, Mr. Jesic received £740,000 in pro rata salary and bonuses, which were not subject to the environmental ban as he was not in the chief executive position during the incidents that triggered the sanctions.
The company has also made changes to its remuneration policy, removing a direct environmental performance assessment score from the criteria determining future bonuses. This measure had been criticised for being heavily influenced by external factors and has been replaced with a customer service metric. However, other environmental measures remain in place. Environmental campaign groups have questioned the justification for multi-million-pound pay packages when companies record tens of thousands of hours of sewage spills, as Severn Trent did in 2025.
A spokesperson for Severn Trent maintained that their remuneration policy aligns with both the letter and spirit of Ofwat's rules, is fully compliant, and is funded by shareholders, not customer bills. They highlighted the focus on long-term delivery for customers, communities, and continued sector-leading environmental performance, as well as £billions in infrastructure investment.