Ofwat to tighten bonus ban for water companies — The Guardian

In the United Kingdom, regulator Ofwat will accelerate its review of rules prohibiting bonus payments to executives at water companies in England and Wales. The regulator fears that substantial fixed payments and increases in base salaries could create the impression that the ban is being circumvented and undermine public trust, The Guardian reports.

Ban for nine companies

Ofwat has banned nine water companies, including Thames Water and Yorkshire Water, from paying bonuses for the 2025–2026 financial year. Seven of these bans are linked to environmental pollution. According to the regulator’s estimate, without the restrictions, the companies would have paid executives £6.5 million.

The ban was introduced by the Labour government last year amid public outrage over sewage entering the United Kingdom’s rivers and seas. At the same time, according to the publication, pay for water company executives has increased over the past two years despite the restrictions introduced.

Payments to retain executives

Ofwat paid particular attention to Anglian Water over payments of up to £800,000 to retain its chief executive, Mark Thurston. The regulator said that such an arrangement could effectively compensate for lost performance bonuses without formally breaching the rules. The company will also face increased scrutiny over corporate governance.

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Ofwat also pointed to possible 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. The regulator will consider whether the restrictions should also apply to payments from parent companies.

Concerns over Thames Water

Thames Water paid its chief executive, Chris Weston, a previously deferred £99,000 bonus after the ban was introduced. Ofwat said that this amount should be paid by the company’s future owners, rather than by consumers through water bills. The regulator also criticised Thames Water for raising senior management’s base pay.

South East Water was not subject to the ban, but its shareholders will have to fund future bonuses following major water supply disruptions that left tens of thousands of households without water.