Water boss paid £1.3m by firm's parent company

Nicola Shaw said it would "not be appropriate" to accept a bonus this year

Yorkshire Water has defended payments of £1.3m given to its chief executive by the firm's parent company.

The water company, which announced a hosepipe ban for millions of users in July, was one of six firms banned from paying "unfair" bonuses to their executives this year.

The Guardian reported Ms Shaw had received £1.3m in previously undisclosed extra pay since 2023 from Yorkshire Water's parent, Kelda Holdings.

The company said this was for work including "investor engagement, financial oversight, and management of the Kelda Group", and the fee was paid by shareholders, not bill-payers.

The Guardian report said the size of the payments were not disclosed in the annual report of the regulated subsidiary, Yorkshire Water Services.

The company, which is one of the largest water firms in the country, said Ms Shaw received £660,000 from Kelda Holdings in the 2023-24 and 2024-25 financial years.

Yorkshire Water acknowledged that Ms Shaw's pay decreased by 33% in 2024/25 to £689,000, after she decided not to take a bonus for the year.

Ms Shaw said earlier this year it would "not be appropriate" to accept a bonus, even before the legislation was introduced, due to Yorkshire Water's record on pollution.

Yorkshire Water has a hosepipe ban in place due to low water stocks

In March, Yorkshire Water was ordered to pay £40m by the regulator Ofwat to address its "serious failures" over wastewater and sewage.

Its investigation found on average the firm discharged untreated wastewater into the region's rivers for seven hours a day in 2023, with almost half its storm overflows found to be in breach of regulations.

The company was ordered to pay more than £900,000 last month after polluting a watercourse with millions of litres of chlorinated water, causing the death of hundreds of fish.

Its Ingbirchworth Water Treatment Works, near Barnsley, discharged intermittently into the freshwater watercourse linking Ingbirchworth and Scout Dike reservoirs for almost a month.

Speaking at Sheffield Crown Court in July, District Judge Tim Spruce said Yorkshire Water had shown a high degree of negligence, resulting in "a prolonged and catastrophic loss of aquatic life".

It came after another fine in May, when the company was ordered to pay £350,000 after a watercourse in North Yorkshire was polluted with sewage.

The spill happened at Foss Dike, near York, in March 2018 close to a faulty pumping station the company knew was broken.

The hosepipe ban was also introduced on 11 July after a period of very hot and dry weather across the country left reservoir stocks low.

'Outrageous'

In response to the payments from Kelda Holdings, Yorkshire Water said in a statement: "As part of her CEO role at Yorkshire Water, Nicola Shaw also does some work for the benefit of Yorkshire Water's parent company, Kelda Group, including investor engagement, financial oversight, and management of the Kelda Group, which is recognised by a fee of £660k paid by shareholders."

It said it did not believe work done on investor-related activities should be paid for by Yorkshire Water customers' bills.

The company added that the fee "reflects the critical importance of the work during this period that was led by Nicola in securing long-term investment for Yorkshire Water".

It said: "We are determined to make improvements to our performance so we can deliver our part in creating a thriving Yorkshire, doing right for our customers and the environment."

Ilkley Clean River Group campaigns against pollution in the River Wharfe

The Ilkley Clean River Group, which campaigns to improve water quality in the River Wharfe, said they had written to Yorkshire Water about they described as the firm's "disregard for customers".

They said in the letter: "Nicola Shaw, whilst persistently saying the company performance is not good enough, and the culture needs to be changed, has been rewarded by a package that seems to be exactly what she would have earnt in bonuses if they hadn't been banned.

"A salary of £3m over two years to manage a company performing so badly, with neglected assets, whilst our bills are hiked by 29%, and a hosepipe ban is in place is incredulous."

Campaign group River Action UK said executives should be held responsible for polluting the waterways.

Head of Campaigns Amy Fairman said, "It's outrageous. Yorkshire Water has just been fined over £900,000 for polluting a watercourse with millions of litres of chlorinated water, killing hundreds of fish, yet its CEO is quietly handed an extra £1.3m through an offshore firm.

"This is business as usual in a system that rewards environmental destruction and shields those responsible."

She added: "Until executives are held criminally accountable, not just cushioned by shareholders, nothing will change."

Listen to highlights from West Yorkshire on BBC Sounds, catch up with the latest episode of Look North.