UK water regulator bans bonuses at 9 companies
Ofwat says the restrictions apply to executive bonuses for 2025–26 and is accelerating a review of the rules amid concern over alternative payments.
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Ofwat says the restrictions apply to executive bonuses for 2025–26 and is accelerating a review of the rules amid concern over alternative payments.
Ofwat, the water regulator for England and Wales, says 9 companies were barred from paying executive bonuses for 2025–26. Seven of the bans related to environmental pollution, and the regulator says the restrictions prevented £6.5 million (about $8.7 million) in executive payments.
The UK government introduced the prohibition under the Water (Special Measures) Act on 6 June 2025, with the rules backdated to bonuses for the financial year beginning in April 2024. Companies automatically lose the right to award bonuses when they fail specified environmental, financial or customer standards, or are convicted of a criminal offense.
The companies identified as subject to the latest bans are Thames Water, Yorkshire Water, Anglian Water, Severn Trent Water, Southern Water, South West Water, Wessex Water and Dŵr Cymru (Welsh Water). The Guardian names eight of the nine companies.
Ofwat says serious performance failures have resulted in £10 million (about $13.3 million) in payments being blocked over two years.
Ofwat is accelerating a review of the rules because it is concerned that companies are undermining the ban. It says the growing use of fixed retention payments and substantial increases in base pay without sufficient explanation or evidence risk damaging public trust and creating the impression that companies are getting around the rule.
The regulator singled out retention payments worth up to £800,000 for Anglian Water chief executive Mark Thurston. Ofwat said the payments could appear to replace prohibited performance-related pay without technically breaching the rule. Anglian will face increased monitoring of its governance arrangements because of the payments.
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The successful offer, valued at more than €1 billion ($1.19 billion), puts the French retailer under the control of Daniel Křetínský’s group.
Thames Water paid chief executive Chris Weston a previously deferred £99,000 (about $130,000) bonus during the year, which Ofwat says the company’s future owners must fund rather than customers through their bills.
South East Water was not subject to the ban, but its shareholders must fund future bonuses, Ofwat says. Supply failures left tens of thousands of its customers' households without water during the financial year.
The Guardian says the review is understood to be considering whether to bring payments from water companies' parent companies within the ban. Ofwat has committed to accelerating the review; an extension has not been adopted.
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