Water bosses' bonuses blocked over pollution issues

Six water companies have been blocked paying bosses' bonuses by industry regulator Ofwat

Six water companies have been blocked from paying bonuses to bosses over serious pollution incidents and other performance issues.

More than £4m of potential bonuses were banned under new rules on performance-related executive pay, according to regulator Ofwat.

The powers were introduced in June as a result of concerns that the pay of water firms' top bosses was not reflecting their environmental performance.

The six companies - Thames Water, Anglian Water, Southern Water, United Utilities Water, Wessex Water and Yorkshire Water - blocked payouts for a variety of failures, mostly involving pollution.

The new rules mean companies are required to block annual bonuses and other awards to directors where they do not comply with the watchdog's rules.

This includes pollution incidents, poor environmental practices and criminal convictions.

Ofwat said that a further £2.4m of performance-related executive pay was not required to be blocked, but should not be funded by customers.

Among the firms that triggered its rules, Thames Water had seven of the most serious category of pollution incidents, recorded in 2024.

It also breached its licence to hold a sufficient credit rating and had a one-star rating in relation to its environmental performance.

This meant that no bonuses or other awards were paid to its chief executive or its former finance chief, who left in March.

Wessex Water triggered Ofwat's rule due to a criminal conviction for a sewage leak in 2024 which killed more than 2,000 fish and resulted in a £500,000 fine.

The company said it therefore decided not to pay any executive bonuses.

Ofwat wrote in its report: "While there has been some progress in certain areas on accountability, water companies must better demonstrate that they understand the feeling of public anger on bonuses and the expectation that they are accountable, and reflect this better in their decisions on executive remuneration."