Executives at UK water companies have received multi-million-pound pay increases over the past year, a development that has drawn criticism due to ongoing pollution scandals, customer bill hikes, and government efforts to ban executive bonuses. The total pay for top water firm bosses reached £25.3 million in the financial year ending in March, an increase from £24.9 million the previous year, according to reports.
Louise Beardmore, chief executive of United Utilities, saw her earnings rise by over £1 million to £2.5 million. Her compensation package included a £435,000 'annual allowance' and a base pay increase to £971,000. United Utilities stated that this remuneration is funded by shareholders and is necessary to retain leadership talent, noting that the allowance did not require performance targets and that Beardmore did receive a bonus in the last financial year without breaching regulatory rules.
Mark Thurston, chief executive of Anglian Water, was paid £1.9 million, which included a £500,000 'retention payment' despite the bonus ban. Anglian Water clarified that this payment was not performance-related and was funded by the parent company for work outside the firm, aimed at maintaining leadership continuity. Thurston previously served as the chief executive of HS2.
These pay rises occur as the water regulator, Ofwat, is set to gain the power to ban bonuses for executives at companies that violate pollution rules. Approximately eight companies are expected to be affected by these new regulations in the 2025-26 period, with retrospective bans possible for firms with serious pollution incidents or financial failures.
Other executives also received significant compensation. Yorkshire Water's parent company provided its chief executive, Nicola Shaw, with an additional £600,000 on top of her £732,000 annual salary. Ruth Jefferson, chief executive of Wessex Water, received a 14% salary increase, which the company attributed to increased role responsibilities. Thames Water paid senior staff not subject to the ban £4.1 million in bonuses.
Some companies under the bonus ban experienced a drop in executive pay, including Southern Water, Severn Trent, and Northumbrian Water. However, Northumbrian Water's chief executive, Heidi Mottram, received a £300,000 'retention payment'.
Critics argue that current government measures are insufficient. Andrew Speke, interim director of the High Pay Centre, stated that the recent figures suggest the government's actions have not gone far enough. Gary Carter, a national officer for the GMB union, criticized the practices, saying they tarnish the reputation of private water companies and indicate a focus on executive profits over public service.
Ofwat confirmed that in the past year, companies were prevented from paying approximately £4 million in potential bonuses. The regulator requires full transparency on all executive remuneration and stated it will take action against any breaches of its rules. The Department for Environment, Food and Rural Affairs (Defra) has stated that any attempt to circumvent bonus ban rules is unacceptable and that it will ensure bonuses are tied to environmental and customer outcomes.
A United Utilities spokesperson emphasized that executive remuneration is not funded by customers and is necessary for leading a major infrastructure investment program. They stated that retention payments are time-bound and targeted to ensure the right personnel are in place to deliver on customer and environmental commitments.