Executives at several water companies are set to receive multi-million pound payments that are not subject to a regulator's new power to ban bonuses for pollution violations. The payments, described as 'retention' or 'allowance' payments, are separate from performance-related bonuses that Ofwat, the water regulator, can block.
Northumbrian Water plans to pay its chief executive £1.5 million over five years as a "retention payment." This payment is intended to incentivize the executive, described as "a highly marketable individual working in a sector where remuneration is exceptionally highly regulated and often subject to media scrutiny." The company's chief executive, Heidi Mottram, has been with Northumbrian Water for a significant period. Earlier in July, Northumbrian Water was fined £500,000 for two sewage discharges into waterways in the North East.
Louise Beardmore of United Utilities, which serves the North West, is also receiving a £435,000 "allowance" that is exempt from the bonus ban. Similarly, Anglian Water is awarding its chief executive, Mark Thurston, £1.3 million in awards, a decision the company stated was made "to ensure the stability of leadership."
In a separate case, Pennon's chief executive, Susan Davy, had an annual bonus of £270,000 reinstated after it was initially blocked. This followed an incident where its South West Water unit poisoned over 500 customers with parasite-infected tap water. South West Water was fined £1.9 million in June for letting cryptosporidium from animal feces contaminate drinking water supplied to more than 16,000 homes in Brixham, Devon, in May 2024. Ofwat had initially banned bonuses to Ms. Davy and a £190,000 payment to Pennon finance director Laura Flowerdew. However, the ban was reversed and payouts were released "following further guidance" from Ofwat, according to Pennon's annual report.
The bonus prohibition was introduced a year ago amidst public outcry over sewage dumping and rising household water bills. The regulation empowers Ofwat to block performance-related awards for senior directors if their water firm is found responsible for severe pollution incidents.
Other executive pay adjustments include a 14% salary increase for Ruth Jefferson, chief executive of Wessex Water, bringing her total to £670,000. Lawrence Gosden, chief executive of Southern Water, received a 3.5% pay rise to £536,000, along with £140,000 for benefits. Thames Water's chief executive, Chris Weston, saw his total pay rise to £1.2 million after a 9.5% increase.