The owner of South East Water (SEW) should not get a bonus after thousands of its customers were recently left without water, the Environment Secretary has said.
David Hinton was rewarded £115,000 on top of his £400,000 salary last year, and his bonus is set to more than double this year – despite repeated and extended water cuts at the company and several ongoing regulatory investigations.
SEW said it does not reward poor performance.
Speaking to the BBC, Environment Secretary Emma Reynolds said: “Poorly performing water owners should not get bonuses and South East Water is the worst performing.”
The problem reached its peak last week with 30,000 properties without water in the south of England, leading to the first investigation of its kind into SEW by regulator Ofwat.
For some households, this was the second time in six weeks that they were left without water supply.
Supply problems before Christmas led to the closure of schools and long queues of people and cars for bottled water.
SEW was repeatedly criticized for lack of clear communication during the crisis, with the deadline for restoring supplies extended several times.
Earlier this month, Chief Executive Hinton was summoned to Parliament to face questions from MPs.
There are growing calls for his resignation from MPs and councilors of all parties and the Prime Minister and the Environment Secretary have noted their concerns about the crisis facing water company customers.
One regulator told MPs that SEW had been “flying like blind” for several weeks before the crisis.
In a statement, a SEW spokesperson said the company “recognizes success but does not reward poor performance”.
“South East Water is committed to a remuneration structure that supports a performance culture.
“The bonus scheme is evaluated by the remuneration committee headed by an independent non-executive director of the company. The executive director is not a part of this committee and has no contribution in his remuneration,” the spokesperson said.
The company has previously said it faces greater pressure than other water suppliers, partly due to population growth in the south of England.
Reynolds’ comments come a day before the government unveiled a major overhaul of the troubled water industry.
It has already vowed to scrap the existing regulator Ofwat and replace it with a new watchdog.
The industry has faced severe criticism in recent years over rising bills and a poor environmental record.
Water bills are set to increase significantly by 2030 to fund water system upgrades.
Under new powers introduced last year, six companies were barred in November from paying bonuses to owners over serious pollution incidents and other performance issues. SEW was not one of them.
A month before that, all but two companies in England and Wales were ordered to return more than £260m to customers for poor performance.