Welsh Water handed out performance-related bonuses of nearly seven-figures to its top three executives over the last two years - despite the fact the company pumped raw sewage into Welsh waterways 100,000 times during the last 12 months alone.
Based on figures from their audited accounts, Peter Perry (chief executive), Mike Davis (chief financial officer) and Chris Jones (executive director) took home performance-related bonuses worth £931,000. That means the three men shared pay packets totalling £2.6m over two years from Welsh Water, a not-for-profit organisation owned by Glas Cymru which is responsible for water and wastewater services to around 1.3m people in Wales.
The Welsh Liberal Democrats, who collated the figures, called the bonuses "eye watering" in light of the way raw sewage continues to be discharged into our rivers and seas. The party is calling for the bonuses to be banned until sewage discharges end.
You can read every place raw sewage is dumped into our rivers and exactly how often it happens here.
Welsh Liberal Democrat Leader and Senedd Member Jane Dodds said: "Welsh Liberal Democrat plans for a sewage bonus ban would stop water company execs being paid a penny in bonuses more until our waterways are protected from sewage dumps. These bosses should be made to hand back the millions of pounds already received in bonuses to help clean up their mess."
The Welsh Water network is a combined system which collects surface as well as wastewater and it risks prosecution if it breaches environmental permits. Welsh Water said it was "pleased" that there was a 10% reduction in spills in 2021. A spokesman added: "Natural Resources Wales analysis of river water quality shows that combined sewer overflows are responsible for less than 5% of the confirmed reasons for rivers not achieving ‘good ecological status’ in our area."
Welsh Water isn't a public sector company and is unique being the only major utility that is a company limited by guarantee. Earlier this year, we scoured the accounts published by public bodies across Wales to put together a list of the highest paid public sector officials in the nation. You can read that here.
Based on the 2020-21 audited accounts Mr Perry enjoyed an annual salary of £309,000, before pension, meaning his earnings outstrip nearly everyone in the Welsh public sector. In 2021 he was awarded performance-related bonuses of £224,000 on top of his salary. With more than two decades of experience working with Welsh Water, he was appointed CEO in April 2020.
Mr Davis, a chartered accountant, took home £245,000 before pension and a further £154,000 in performance bonuses in the same financial year, making him a top earner too.
Mr Jones, the former CEO, was paid £319,000 in 2020 and just £38,000 in 2021 due to his change in role. He took home bonuses of more than a quarter of a million pounds (£251,000) while CEO in 2020.
The bonuses are awarded as 'annual variable pay', which looks at key indicators like customer service and operational performance, and 'long term plan', which looks at things like drinking water acceptability, mains repairs and investment programmes.
For the current financial year, 2021-22, Mr Perry's base salary was raised to £331,617 and Mr Davis's to £262,830. If all annual variable pay and long-term incentive performance targets are met by each of them, then the maximum Mr Perry could earn this year is £1.033m and Mr Davis £710,000.
Welsh Water said its executive pay is decided by independent non-executive directors on the company's remuneration committee. A spokesman for the company said: "No-one takes part in decision-making regarding their own pay. The Executive Remuneration policy is subject to approval by our independent Glas Members and the annual Directors’ Remuneration Report is also subject to an advisory vote by the company’s Members in the same way as a listed company’s shareholders approve executive remuneration."
They added the £2.6m pay packets included accruals to a group pension scheme which cannot be taken as cash benefits.
