Thames Water: Water boss bonus ban comes into force
Six water companies including crisis-hit Thames Water will be banned from paying bonuses to senior bosses.
New measures in the Water (Special Measures) Act come into force on Friday, prohibiting utility firms that oversee “poor environmental and customer outcomes” from offering bonuses to senior bosses.
The companies impacted are Thames Water, Yorkshire Water, Anglian Water, Wessex Water, United Utilities, Southern Water. If any of them pay bonuses while under the ban, the water regulator Ofwat has the power to step in and take the back.
More than £112m in bonuses and incentives have been awarded by UK water firms over the last decade. Some £7.6m was awarded last year alone.
“Water company bosses, like anyone else, should only get bonuses if they’ve performed well, certainly not if they’ve failed to tackle water pollution,” Steve Reed, environment secretray, said.
“Undeserved bonuses will now be banned as part of the government’s plan to clean up our rivers, lakes and seas for good.”
Thames Water on the brink
It comes just days after Thames Water, the UK’s biggest water supplier, was plunged into a face crisis after KKR abandoned an attempted rescue bid.
The utility has amassed debts of nearly £20bn while failing to invest adequately in its infrastructure network, resulting in a huge increase in sewage leaks.
Thames came under fire earlier this year for carving out hefty bonuses for top executives from a £3bn emergency loan provided by a group of senior creditors. It was hit by a record fine from Ofwat last week over dividend payments and issues at its wastewater operations.
A Southern Water spokesperson said: “We note the Government’s announcement and await full details of how this will impact our existing approach to performance-related reward.
“This is already closely tied to the delivery of improvements in customer satisfaction and environmental performance.
“Any bonuses are paid by shareholders, not customers, and are overseen by an independent committee.”
WaterUK, the representative body for the sector, has been approached for comment.