Anglian Water chief lands £1.3m pay despite two-star pollution rating

The boss of a water company with one of the worst pollution records in England has been handed more than £1m in pay and bonuses.

Rewarding failure, something we excel in! – Owl

Alex Lawson 

Anglian Water chief executive Peter Simpson faces criticism after he landed a “substantial” £337,651 bonus as part of a £1.3m pay package.

The reward comes despite English water firms overseeing such shocking levels of pollution that the Environment Agency has said water company bosses should be jailed for serious offences.

Anglian Water recorded nearly a quarter of all serious pollution incidents in 2021, according to the agency. It had the third-highest rate of total pollution incidents per 10,000 square kilometres with 34, behind Southern Water with 94 and South West Water with 87.

Anglian was given two stars out of five in the EA’s performance rating, meaning it requires significant improvement.

Anglian Water Services’ annual report now shows Simpson and chief financial officer Steve Buck saw their maximum bonuses cut by 45% after missing customer delivery targets, which included goals on pollution and flooding. Simpson saw 5% of his 2019 bonus clawed back too.

Simpson’s base salary rose to £531,365 in 2021-22, up from £505,277 a year earlier. Buck received a £919,253 pay package including a £228,243 bonus.

Rival utility company Thames Water is also facing heat for handing its chief executive, Sarah Bentley, £727,000 worth of bonuses despite its own poor performance on pollution.

The bulk of Bentley’s bonus will be distributed as part of a £3.1m “golden handshake” sign-on payment that is reportedly to be distributed to her within days of the EA report’s release. The agency also gave Thames Water a two-star rating.

Natalie Ceeney, chair of Anglian’s remuneration committee and an experienced former civil servant, said: “Our environmental performance in 2021-22, including on pollution and flooding, haven’t reached the levels our customers, stakeholders and regulators expect from us.

“We are very clear that poor performance should not be rewarded. As such, our underperformance in these key areas cancels out strong performance in other areas such as leakage.

“This means the performance measures element of the bonus scheme will not pay out at all this year.”

Simpson’s overall package, which was benchmarked against his peers’, fell 37% from £2.1m the year before. However, pay campaigners said the curbs did not go far enough.

Andrew Speke of the High Pay Centre thinktank said: “When the Environment Agency is calling for water company bosses to be jailed over their record on pollution, boards of the worst offending companies should be taking serious action to improve the management of their companies.

“So for Anglian Water, one of the worst offenders, to be awarding their CEO a substantial bonus shows that the rot goes deep in this sector.

“It’s time for the government to intervene and either increase regulation or bring the sector into public ownership, because the current model is failing people and the environment.”

Anglian Water Services has proposed a final dividend of £169m which was reduced by £9m to “reflect the outcome delivery incentives penalty in the period”. The firm expects to pay a £8.3m penalty after missing targets including on pollution, flooding and burst mains.

Nearly £92m of the dividend will be paid to the company’s ultimate owners – a collection of pension and infrastructure funds in the UK, Australia and Canada as well as an investment group based in Luxembourg and owned by the Abu Dhabi Investment Authority.

Anglian said its shareholders had not received a dividend payment since 2017 and had invested over £1.1bn into the business.

The company has also set up an “escaped sewage cell” – a dedicated team tackling pollution using “military planning methods”.