Ofwat has blocked nine water companies from paying more than £6.5 million in executive bonuses, citing the firms' record on pollution and other performance failures. The regulator also confirmed that Thames Water customers will not cover the cost of a £99,000 bonus already paid to its chief executive, Chris Weston.
Bonus bans and retention payments
The watchdog said it had used its powers to stop the payments, which mostly affected chief executives and finance directors, either current or former. It also criticised the growing use of "retention payments" - rewards for staying in post - and increases in base pay for top bosses, which it said could be an attempt to bypass the bonus rules.
Ofwat has brought forward a planned review of the rules from 2027, launching a call for evidence. The latest bans bring the total blocked to more than £10 million over the past two years.
Public trust and sector response
Helen Campbell, interim executive director for delivery at Ofwat, said: "It is disappointing that so many companies continue to trigger the rule through serious performance failures which has seen £10million in payments blocked in the past two years."
She added: "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."
Companies affected and pay details
The nine suppliers are Anglian Water, Northumbrian Water, Severn Trent Water, Southern Water, South West Water, Thames Water, Wessex Water, Yorkshire Water and Dŵr Cymru. The Performance Related Executive Pay (PRP) Prohibition Rule covers all 16 water companies in England and Wales.
Thames Water gave Chris Weston a 14% pay rise last year, to almost £1 million, and its finance boss received a 26% increase. Weston's package also included more than £100,000 towards his pension, a £15,000 car allowance, private medical insurance of almost £2,600, and £57,244 for unused annual leave. He also received a £99,000 bonus from a 2023/24 scheme, which Ofwat said was not "at all justified" given the "serious performance issues" that year.
Ofwat also warned that Anglian Water's approach to retention payments was "especially concerning". Its chief executive, Mark Thurston, was paid £500,000 as a reward for staying, as part of a near £1.86 million package for last year, and banked more than £450,000 this month under a separate scheme. Ofwat has written to Anglian to make clear it "must improve its approach to governance and transparency on executive remuneration."
