Bosses at six UK water companies face ban on bonuses
Bosses at six water firms including Thames Water will be banned from receiving bonuses this year because of serious environmental pollution and other failings.
It is the first time water chiefs have been banned from receiving such financial incentives, which are worth hundreds of thousands of pounds.
The scale of incentives paid to water leaders, totalling more than £112 million over the last decade, stoked public anger as sewage spills hit record levels. Labour's manifesto promised to ban them for water companies that missed standards.
Senior executives at Thames Water, Yorkshire Water, Anglian Water, Wessex Water, United Utilities, and Southern Water will now be barred from receiving bonuses for the 2024 to 2025 financial year. The move was made possible by a law passed in February, the first step in the government's reforms of the sector.
Louise Beardmore, CEO of United Utilities, which caused more raw sewage spills than any other water firm in 2024, will be blocked from taking her bonus, which was £440,000 last year. Thames Water CEO Chris Weston, who recently defended taking his £195,000 bonus last year, will also miss his.
Leaders of three companies escaped the ban, as they avoided serious shortcomings on environmental, financial and customer performance.
Those include the sector's highest paid leader — Liv Garfield, the Severn Trent CEO, who earned £3.2 million last year including a £584,000 bonus. Susan Davy, CEO at South West Water, will also be able to take hers, despite the outbreak of a parasite in Devon that caused drinking water contamination in May 2024.
Caroline Voaden, the Lib Dem MP for South Devon, said: 'It's hard to think of a company more deserving to have its boss's bonuses banned than South West Water. The company's absence is baffling and throws the validity of the entire policy into doubt.'
Liv Garfield, the Severn Trent CEO, last year defended her multimillion-pound pay package and claimed that Severn Trent had made 'massive progress on river quality'
DAVE BENETT/GETTY IMAGES FOR VEUVE CLICQUOT
Heidi Mottram, the Northumbrian Water CEO who took a £234,000 bonus last year, will also be eligible to take one. Her company was fined £15.6 million this week by Ofwat for excessive sewage spills.
There are fears that bosses' salaries will simply be raised to compensate for any missed bonuses. 'Any attempt to inflate base pay as a workaround must be stamped out,' said James Wallace, CEO of the charity River Action.
A government source vowed to take more action in future if companies tried a workaround. Were a banned company to flout the ban when company reports are published this summer, regulator Ofwat has powers to claw back the money.
Thames Water was hit by a ban because it was responsible for seven of the most serious pollution incidents last year — category one — from the Chilterns to London. It also failed to clear the bar on financial stability, because its credit rating was downgraded to an unacceptable level in April 2024.
Southern Water, Anglian Water, United Utilities, and Yorkshire Water were all banned for a single category one pollution incident. Yorkshire also failed on consumer standards, while Wessex Water failed because of a criminal conviction after sewage killed thousands of fish.
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However, the CEO of Wessex will be able to take a bonus, as will the chief financial officer at Anglian, because of when they were appointed.
The ban is time-limited. If the nine utilities perform satisfactorily this year, bosses will be eligible to take them next year. Two years ago, some chief executives voluntarily waived their bonuses in the face of public anger over environmental failures.
The Times's Clean it Up campaign has been calling for stronger regulation to help Britain's rivers and seas. Steve Reed, the environment secretary, said: 'I applaud The Times for shining a light on the payment of unfair bonuses to water bosses. We promised to take action — and this historic ban comes into force today.'
The bans come days after Thames Water's rescue creditor pulled out, increasing the risk of the debt-saddled company collapsing into nationalisation. A government-appointed commission said this week the water industry was suffering 'deep-rooted' issues that would require wide-ranging regulatory reforms to solve.
driest springs on record.
Reservoirs in England were 77 per cent full at the end of May, compared with 85 per cent at the end of May 2022, a year which saw widespread drought. The average for the end of May is 93 per cent.
Drought has been officially declared in the northwest. The northeast, Yorkshire and east and west Midlands are classed as in 'prolonged dry weather', the final stage before drought.
Youlgrave Waterworks, a tiny water firm which serves 500 homes in Derbyshire, has introduced a hosepipe ban, with other companies keeping them under review. In a sign of the escalating risk of restrictions on water use, the drought group will now meet monthly.
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