Severn Trent has significantly increased the long-term incentive package for its new chief executive, James Jesic, a move that has reignited debate over executive pay in the UK's water industry. The revised remuneration plan allows Jesic to earn up to £3.1 million through long-term incentives, with his total annual compensation potentially reaching £4.8 million when salary, bonuses, pension contributions, and other benefits are included.

The company raised the value of its Long-Term Incentive Plan (LTIP) from 200% to 400% of Jesic's base salary while reducing the maximum annual bonus from 120% to 100%. Jesic, who became chief executive in January with a base salary of £775,000, received pro-rata salary and bonus payments during his first months in the role because the regulatory restrictions on executive bonuses did not apply to him.

The decision comes as public scrutiny of water company executive pay remains high following years of sewage pollution incidents across rivers and coastlines. Severn Trent confirmed that former chief executive Liv Garfield was among several industry leaders prevented from receiving performance bonuses after environmental failings triggered new regulatory rules introduced by Ofwat.

The company has also revised the performance measures used to determine future executive rewards. An environmental performance assessment has been removed from the primary bonus calculation and replaced with a customer service metric, although several environmental targets remain part of the overall incentive framework. Severn Trent argues that the previous assessment could be disproportionately affected by factors outside management's direct control.

Campaign groups have criticised the revised pay structure, questioning whether multimillion-pound executive rewards are appropriate while pollution incidents continue to affect waterways. Environmental advocates argue that executive compensation should remain closely linked to measurable improvements in environmental performance.

Severn Trent defended its remuneration policy, stating that executive incentives comply fully with Ofwat regulations and are funded by shareholders rather than customer bills. The company says it is investing billions of pounds in infrastructure upgrades, has reduced sewage spills significantly over the past year, and remains confident of maintaining one of the strongest environmental records in the UK water sector.

The controversy reflects wider concerns over executive compensation across Britain's water industry, where regulators continue to tighten oversight while companies face increasing pressure to improve environmental performance and rebuild public trust.