Utility Week

8 | 22ND - 28TH FEBRUARY 2019 | UTILITY WEEK A UtilityWeek c ampaign Analysis A union's view O nly a month before Ofwat unveiled its package of reforms in July 2018, the GMB union branded nine water chief executives "fat cats" for receiving excessive pay packages. GMB launched a "Take Back the Tap" campaign to bring Eng- land's privatised water industry back into public ownership, and says water bosses have "trousered" £58 million in "salary, bonuses, pensions and other benefits" over the past five years. The union placed Severn Trent's chief executive, Liv Garfield, top of what it dubbed the water industry's "fat cat league", for taking home a "staggering" £2.4 million in 2017. In response, a spokesperson for Severn Trent (one of only three companies whose PR19 spending plans were given fast track status by Ofwat this month) said its priority was to perform for its custom- ers, and that its record on customer ODIs [outcome delivery incen- tives], the measures that matter most to customers, had been strong. "Remuneration for our executives is based on a range of chal- lenging performance targets and is in line with pay at companies of a similar size." United Utilities (another of the three water firms whose business plans passed Ofwat's test to get fast track status) was also listed as having "splashed out" £2.3 million on its chief executive, Steve Mog- ford, last year – an increase of 49 per cent on 2013. A spokesperson for the company responded: "The vast majority of Steve Mogford's remuneration is linked to the delivery of stretching targets aimed at further improving customer service, operation deliv- ery and environmental performance. "In 2017, his total remuneration was approximately half the aver- age for a FTSE-100 CEO." GMB also listed the pay of seven other chief executives of water companies: Anglian Water; Northumbrian Water; South West Water; Southern Water; Thames Water; Wessex Water and Yorkshire Water. The figures, from a joint investigation into company accounts by GMB and Corporate Watch, were labelled "eye-watering" by GMB general secretary Tim Roache and "further proof the water industry must be returned to public hands". Meanwhile, the Consumer Council for Water said it wanted to see a "stronger correlation" between pay bonuses and achieving cus- tomer commitments. Its chief executive, Tony Smith, warned: 'Other- wise there is a risk that the legitimacy of the industry will be further eroded in the eyes of customers." GMB says water bosses have "trousered" £58 million in "salary, bonuses, pensions and other benefits" over the past five years. A CEO's view I t's not easy to get the industry's chief executives to expand on the sub- ject of their pay and packages, despite remuneration being a matter of public record. However, never one to shy away from a tough sub- ject, Northumbrian Water's chief execu- tive, Heidi Mottram, was happy to field the question on whether executive pay was too high when interviewed recently by Utility Week. Mottram, who earned £667,000 in 2017/18, said: "It's important that we articu- late and describe the contribution that we make and the service that's provided to our customers. "Generally, when the debate goes on around executive pay, I think the public get frustrated if the CEO is not success- ful or delivering but still appears to be well--remunerated. "When people are successful, and they deliver for their customers, people feel it is fair and appropriate. "But these calls will cause us to reflect again about a greater level of transparency and a link to what we're delivering. "If you deliver and you lead, and you make success, then I think the public typi- cally go: that's okay. It's when there isn't success, I think, is where that anxiety comes from." Northumbrian Water chief executive Heidi Mottram

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