Water industry bonus ban to be tightened as Ofwat warns of ‘damage to public trust’
Summary
Ofwat will speed up a review of water company pay rules after it warned that retention payments and higher base salaries could undermine the bonus ban and damage public trust. Nine water companies in England and Wales are barred from paying bonuses for 2025-26, and the government says it wants to close loopholes.Key Facts
- Ofwat said nine water companies in England and Wales were banned from paying bonuses for the 2025-26 financial year.
- Seven of the nine bonus bans relate to environmental pollution.
- Ofwat singled out Anglian Water over retention payments worth up to £800,000 for chief executive Mark Thurston and said it would increase monitoring of the company's governance.
- Ofwat highlighted potential retention payments of £1 million for Thames Water's chief financial officer, £1.5 million for Northumbrian Water chief executive Heidi Mottram, and £1.7 million for United Utilities chief executive Louise Beardmore.
- Ofwat's review will consider whether payments from water companies' parent companies should be covered by the ban.
- Thames Water paid chief executive Chris Weston a previously deferred bonus of £99,000; Ofwat said the company's future owners, rather than customer bills, must cover it.
- Ofwat said the companies would have paid executives another £6.5 million during the year if the bonus ban had not been in place.
- Environment Secretary Angela Eagle said the government wanted to close loopholes so that failure does not pay.
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