Water companies are banned from receiving executive bonuses

A new law has prohibited six water companies from paying bonuses to their bosses.

The Water Act, which includes stricter measures against paying bonuses to executives of companies that fail to meet environmental standards or are not financially stable, comes into effect today (6 June).

Six companies have been prohibited from paying bonuses. These are: Anglian Water (Southern Water), Thames Water (United Utilities), Wessex Water (Wessex Water) and Yorkshire Water.

The ban has been backdated until April 2024. This means that the water regulator Ofwat may force companies to clawback bonuses already paid.

The government reported that water companies in England paid bonuses of PS7.6 Million in the past year.

According to Steve Reed, the environment secretary, executives of water companies “should only receive bonuses if their performance has been good, and certainly not if there is a failure to combat water pollution.”

The Water Commission, in an independent review this week, found that the public’s trust in water companies was eroded due to “pollution and financial problems, poor management, and infrastructure failures”.

The review led by Sir Jon Cunliffe – former deputy governor of Bank of England – found that the UK water system had suffered from “deeply rooted, systemic, and interlocking failures” over the years.

Water UK, a trade association representing the water industry, responded to the report by saying: “Everyone is in agreement that the system does not work.”

We hope that this report will serve as a springboard for fundamental reforms in the sector. We need to simplify the system to allow investment to reach its destination quickly.

Companies are investing PS104 billion in the next five year period to ensure our water supply, stop sewage from entering our rivers and oceans, and support economic development.

Personnel Today has HR jobs in the Utilities sector.

Browse HR positions in the utilities sector