Northumbrian Water is among nine water companies across the UK to have triggered bonus bans, with £6.5 million worth of executive bonuses blocked in the last year because of company failures, mainly involving pollution and enforcement cases.
The companies triggered Ofwat's bonus ban rule in 2025-26, bringing the total blocked to more than £10 million since 2024. Alongside Northumbrian Water, the firms include Anglian Water, Severn Trent Water, Southern Water, South West Water, Thames Water, Wessex Water, Yorkshire Water and Dŵr Cymru.
Ofwat raises concerns over remuneration behaviour
Ofwat, which is reviewing the performance-related executive pay (PRP) prohibition rule, said it had spotted "significant changes in remuneration behaviour" by several companies that risk undermining the ban. An assessment released on Thursday noted the growing use of so-called retention payments and substantial increases in base pay "without sufficient explanation or supporting evidence", which it said could create a perception that companies are circumventing the rule and damage public trust.
Environment Secretary Dame Angela Eagle said: "People are sick of seeing water bosses profit while rivers are polluted and customers are repeatedly let down. A wide-ranging review launching today will ensure that failure doesn't pay, whatever name the payment goes by."
"The bonus ban was the first step. Where there are loopholes, I want them closed," she added.
Review accelerated to close loopholes
Ofwat's interim director Helen Campbell said: "It is disappointing that so many companies continue to trigger the rule through serious performance failures which has seen £10 million in payments blocked in the past two years."
"Public trust in the water sector remains low, and executive bonuses which do not reflect performance, use of retention payments and poorly explained increases in base pay contribute to that low trust. That is why we are accelerating our review to ensure the rule better delivers the outcomes customers rightly expect," she said.
Northumbrian Water has been contacted for comment.
