Southern Water’s boss pocketed over £700,000 in the last financial year as customers prepare for a hike in their bills.

The water firm’s annual report and financial statements shows chief executive Lawrence Gosden was paid a base salary of £480,000 and received a bonus of £183,000.

He also received £28,600 in benefits and £72,000 in pension contributions, bringing his total remuneration to £764,000.

The report also showed that from April 1, Mr Gosden’s salary increased to £500,000, a rise of 4.3 per cent.

None of the firm's executives took a bonus the previous year.

Stuart Ledger, Southern Water's chief financial officer, was paid a salary of £371,000, benefits of £70,000, a bonus of £128,000 and a pension contribution of £40,000, bringing his total remuneration to £610,000.

A Southern Water spokesman said the bonuses will be paid for by shareholders and not customers and were awarded on the basis that there were “significant advances in treated water quality, a reduction in overall pollution numbers and falling customer complaints”.

“Having declined a bonus last year, Southern Water’s CEO and CFO will receive a partial bonus in 2024, paid by shareholders rather than from customers' bills, after the board’s remuneration committee acknowledged progress made in delivering on the company’s ambitious Turnaround Plan," he said.

“Despite the region’s wettest year on record, the committee highlighted significant advances in treated water quality, a reduction in overall pollution numbers and falling customer complaints but also recognised areas where further progress is needed.”

Mr Gosden’s fat pay cheque comes as customers face the largest increase in bills of all water firms in England and Wales.

Household annual water bills for Southern Water customers, which provides water supply to much of West Sussex, as well as wastewater treatment for much of East and West Sussex, will rise by an average of £183 - 44 per cent - in the next five years.

Every five years, regional water suppliers in England and Wales must submit their business plans to regulator Ofwat for the upcoming half decade.

The plans include how far they can increase bills over the period and how much they will spend on upgrading drains, sewers and reservoirs.

While the increase is less than many water companies had asked for, it has sparked anger from consumer groups, after many firms’ dire records on sewage spills and water leaks.

Southern Water had asked Ofwat to approve a 73 per cent increase over the five years to 2030 before inflation, however Ofwat said “we consider that Southern Water can deliver its performance commitments and obligations for less cost than it requested”.

Southern Water said its bills have been kept low and the average combined water and wastewater bill has increased by only £2 in the past ten years in nominal terms. It said it has been charging "far less" than other comparative water companies.

It added that it has a "unique combinations of hurdles to overcome", with aims to "drastically cut the use of storm overflows along our hundreds of miles of coastline and inland waterways", which it said will take time and a lot of money to tackle.

Chief financial officer Stuart Ledger said: "Since submitting our business plan in October, we have continued to engage with stakeholders and customers to feed into Ofwat’s process. 

"We are now reviewing Ofwat’s Draft Determination and we will publish our response on 28 August 2024, ahead of Ofwat’s Final Determination in December 2024."

Environment Secretary Steve Reed promised steps towards “ending the crisis in the water sector”, including so-called customer panels to “hold (bosses) to account”.

And Chancellor Rachel Reeves promised the government will "get a grip" on the water sector, saying: "It’s clearly a bitter pill for people who are seeing today’s announcements about higher water bills.”

Recent data from the Environment Agency revealed that sewage was dumped into Lewes waterways for 17,644 hours on 1,512 separate occasions in 2023. EA said that was an 87 per cent increase on the previous year.

In March, it was revealed that sewage spills into seas and rivers by Southern Water nearly doubled in a year.

There were 29,494 spills last year by the company, up from 16,688 the previous year.

The water giant's sewage spills lasted for a total of 317,285 hours in 2023, equivalent to more than 36 years.