Analysis of water company accounts shows total compensation for chief executives and chief financial officers increased by 1.5% over the past year, reaching £25.3 million, marking the second consecutive year of pay growth despite a bonus ban introduced in 2025.
Water companies have used various payment mechanisms to circumvent restrictions on performance-related bonuses. Anglian Water provided chief executive Mark Thurston with £1.9 million in total compensation, including a £500,000 “retention payment” it claims falls outside bonus ban regulations. United Utilities chief executive Louise Beardmore received £2.5 million, representing a £1.1 million increase from the previous year. Yorkshire Water’s parent company paid chief executive Nicola Shaw an additional £600,000 beyond her base salary, while Wessex Water granted its chief executive a 14% salary increase despite being subject to the ban.
The revelations have drawn criticism from multiple quarters amid mounting concerns about the water industry. Thames Water, Britain’s largest water company, faces potential insolvency, while approximately 23 million people remain under hosepipe restrictions. The High Pay Centre questioned the effectiveness of current government measures, stating that restricting bonuses has limited impact when executives receive comparable overall compensation through alternative payment structures. Union representatives and opposition politicians have called for more fundamental industry reforms, including increased public ownership and stricter governance of executive compensation.
Ofwat, the water regulator, is expected to formally confirm which companies face bonus ban restrictions later this year. A government spokesperson stated that any circumvention of bonus rules is unacceptable and committed to ensuring bonuses are only awarded when companies deliver environmental and customer outcomes.
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