Failing water firms banned from handing fatcat bosses £6.5million in bonuses

Detailed summary

Ofwat blocks nine water firms from giving bigwigs bonuses after rule failures as it fast-tracks review of 'retention' payments

Fat cat bosses at nine failing water firms have been blocked from pocketing more than £6.5million in bonuses.

Regulator Ofwat announced it had invoked powers to ban the bumper rewards, mainly for their firms’ track records on pollution. The watchdog also confirmed that Thames Water customers would not pick up the tab for a £99,000 bonus that had already been dished out to its boss, Chris Weston.

And it slammed suppliers’ growing use of “retention payments” - rewards for staying - and base pay hikes for top bosses, which have been seen as an attempt to sidestep the bonus blocking rules.

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Ofwat said it had brought forward a planned review of the current rules from 2027, with a call for evidence launched today. The latest bonus bans take the total to more than £10million in the past two years.

It comes amid public fury at the bonanzas that are still being handed to fat cat executives when companies have failed to tackle a sewage and pollution scandal.

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.

“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.”

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.

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