United Utilities banned from awarding bonuses to executives under new Ofwat rules
Water supplier United Utilities has been barred from awarding bonuses to its most senior executives after the introduction of new regulations aimed at holding water companies accountable for their performance.
The new rules, which came into force on Friday 6 June under the Water (Special Measures) Act, mean United Utilities cannot offer financial bonuses to its chief executive or chief financial officer.
The measures apply to companies that fail to meet environmental or consumer standards, fall short on financial resilience, or are convicted of a criminal offence.
Regulator Ofwat has been given new powers to recover any bonus payments made in breach of the ban.
The restrictions are not permanent, and United Utilities may be able to resume performance-related rewards in 2025/26, provided it complies with the new conditions.
The Department for Environment, Food and Rural Affairs (Defra) has revealed that over the past decade, more than £112 million in bonuses and incentives have been paid out by UK water companies. Ministers say this is no longer acceptable where companies have failed to meet key standards.
Commenting on the new measures, Environment Secretary Steve Reed said: ' Water company bosses, like anyone else, should only get bonuses if they've performed well, certainly not if they've failed to tackle water pollution.
'Undeserved bonuses will now be banned as part of the Government's plan to clean up our rivers, lakes and seas for good.'
Campaign group River Action has welcomed the ban, but warned against companies attempting to bypass it by increasing base pay.
Chief executive James Wallace said: 'We won't end pollution for profit until water companies are refinanced and governed for public benefit. Any attempt to inflate base pay as a workaround must be stamped out.'
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