Water company executives received increased total compensation over the past year despite a government ban on performance bonuses and widespread public criticism of the sector, according to an analysis of 14 major utilities serving England and Wales.
Chief executive and chief financial officer pay packets increased by 1.5% to £25.3 million for the year ending in March, up from £24.9 million the previous year. The largest individual package went to Louise Beardmore of United Utilities at £2.5 million, while Mark Thurston of Anglian Water received £1.9 million including a £500,000 “retention payment.” Several companies implemented salary increases and utilized alternative compensation mechanisms to maintain executive pay levels despite the bonus restrictions.
The compensation increases occur amid significant industry challenges, including Thames Water’s financial difficulties and drought-related hosepipe bans affecting approximately 23 million people. Water companies face mounting pressure to fund infrastructure improvements for aging treatment facilities and leaking pipes, which have resulted in sharp increases to customer bills. Additionally, the sector has drawn sustained criticism for persistent sewage discharges into Britain’s waterways.
Companies subject to the bonus ban have employed various strategies to reward executives, including payments from parent companies, retention bonuses, and salary increases justified as reflecting job responsibilities rather than performance. Eight companies indicated they expect to be covered by the restrictions for 2025-26, with the ban applying retrospectively to firms responsible for serious pollution incidents or financial failures.
Government officials and regulatory observers have questioned the effectiveness of current measures. The High Pay Centre suggested that restricting bonuses proves ineffective if executives receive comparable compensation through alternative channels, and recommended the government consider additional governance reforms. Meanwhile, political figures including Andy Burnham have proposed increasing public control over the water sector, with potential temporary government ownership of Thames Water under consideration.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI