Outrage Over Bonuses: Should South East Water's CEO Get Paid After Customer Outages?

In a controversial statement, Environment Secretary Emma Reynolds has argued that David Hinton, the CEO of South East Water (SEW), should not receive a bonus this year amid significant criticism regarding the company’s performance, which recently saw tens of thousands of customers facing water outages. Last year, Hinton pocketed £115,000 in bonuses on top of his hefty £400,000 salary, but this year’s bonus is expected to more than double despite ongoing issues.

The crisis peaked last week when up to 30,000 properties in southern England had no water. Customers faced repeat outages, including two instances within just six weeks, prompting extensive criticism and investigations from regulator Ofwat. This situation forced schools to close and left many queuing for bottled water, revealing SEW’s poor communication during the crisis as deadlines for supply restoration were repeatedly pushed back.

MPs from all parties have voiced their concerns, with increasing calls for Hinton’s resignation. A regulator even reported that SEW had been ”flying blind” for weeks leading up to these outages. In response to the crisis, a SEW spokesperson stated that while the company aims to foster a performance culture, they do not reward poor results.

The ongoing frustrations come on the eve of a government announcement aimed at overhauling the troubled water industry altogether, including plans to replace Ofwat with a new regulatory body. The comments from Reynolds are a part of the broader government initiative to address rising water bills and the significant dissatisfaction with water suppliers’ environmental records. Last November, various companies were prevented from issuing bonuses to executives due to severe pollution incidents, highlighting a growing scrutiny of executive compensation amidst widespread operational failures.