Revealed: Water firm bosses’ multi-million-pound pay hikes despite pollution scandals and bonus bans

Water firm bosses received pay rises totaling millions of pounds last year amid public anger over pollution and bills, as well as government bonus bans.

Among the senior water bosses to receive the biggest pay rise was Louise Beardmore, chief executive of United Utilities, who earned £2.5 million this year; this was an increase of over a million pounds over his salary the previous year.

The FTSE 100 firm, which does not intend to remain under the bonus ban, gave Beardmore a fixed salary increase of £971,000, along with a £435,000 ‘annual allowance’.

The water company said the money was provided by shareholders and was needed to protect leaders. The ‘annual allowance’ increase had no performance requirements.

He also added that Beardmore received a bonus because it claimed it had not breached any Ofwat rules in the last financial year.

Mark Thurston, chief executive of Anglian Water, was paid an eye-watering £1.9 million, including a £500,000 ‘continuation payment’ despite a bonus ban.

Eight companies are expected to be affected by the new rules in 2025-26, with water regulator Ofwat gaining the power to ban bonuses to bosses at companies that breach pollution rules.

Firms responsible for the most serious pollution incidents or financial failures can also be punished with retroactive bonus bans.

Louise Beardmore, chief executive of United Utilities, earned £2.5 million this year; this represented an increase of over a million pounds to his salary the previous year.

But despite the ban, the pay of senior water firm bosses reported by water companies stood at £25.3 million in the financial year ending this March; This is up from £24.9 million the previous year. Guard reported.

This is the second year in a row that water company bosses’ salaries have increased despite a government ban on bonuses.

In recent years, water companies’ charges have come under scrutiny due to rising pollution in the country’s rivers and seas, as well as firms’ steep bill increases due to late investments in poor quality pipes, new reservoirs and outdated treatment plants.

And a recent ban on hosepipes in 20 parts of England during Britain’s scorching summer weather has fueled further anger.

In some cases, firm bosses were given additional rewards that companies claimed were not ‘performance-related payments’ or bonuses and therefore did not fall within the scope of the Ofwat bonus ban.

While Anglian Water confirmed it would fall within the ban, its boss continued to give Thurston, once Britain’s best-paid public servant, most of his salary through the water company’s parent company.

The former HS2 boss was also given a £500,000 ‘standstill payment’ this way.

The water company said it did not count the half-million-pound ‘custodial payment’ as a bonus because it was not linked to the firm’s performance.

They added that this amount was funded by shareholders for work outside the company. It also noted the need for ‘targeted, time-limited retention arrangements to maintain continuity of leadership’.

Meanwhile, its parent company paid chief executive Nicola Shaw £600,000 on top of her £732,000 annual salary, despite Yorkshire Water believing it would fall within the bonus ban.

And Ruth Jefferson, chief executive of Wessex Water, was given a 14 per cent pay rise despite the firm being banned from handing out bonuses. The water company said the increase demonstrated the responsibilities of the role.

Thames Water paid £4.1 million bonuses to senior staff who were not covered by the ban.

It was stated that Thames Water and Dŵr Cymru Welsh Water will be covered by the ban on bonuses to bosses.

Some firms under the ban, including Southern Water, Severn Trent and Northumbrian Water, have seen bosses’ pay fall.

But the firm’s chief executive, Heidi Mottram, received a £300,000 ‘standstill payment’.

Andrew Speke, interim director of the High Pay Centre, said the latest figures showed ‘the government’s current measures do not go far enough’.

Meanwhile, Gary Carter, national officer of the GMB union, which represents many water company workers, said: ‘Finding ways around the bonus ban would further damage the reputation of private water companies.

‘This makes them look like cash-grabbing wealth grabbers more interested in lining their own pockets than providing fresh, clean water to the people of the UK.

‘Senior executive pay is out of control and the government needs to fundamentally overhaul water companies – with more public control – to fix this.’

Water regulator Ofwat will announce which water companies fall within the bonus ban this autumn.

However, bans may be imposed on companies that are responsible for serious pollution incidents or are struggling financially.

A Department for Environment, Food and Rural Affairs spokesman said: ‘We have banned undeserved bonuses to water company bosses. Any attempt to circumvent the rules is completely unacceptable.

Yorkshire Water’s parent company paid chief executive Nicola Shaw £600,000 on top of her £732,000 annual salary

Heidi Mottram, chief executive of Northumbrian Water, receives £300,000 ‘standby payment’

‘We will leave no stone unturned to ensure bonuses are only paid where companies deliver environmental and customer outcomes, and Ofwat’s review of the bonus rule will carefully consider whether any requirements need to be tightened.’

A spokesperson for Ofwat said: ‘Rebuilding public confidence in the water sector is vital and central to our rules on executive pay; Last year alone, companies were banned from paying out nearly £4 million in potential bonuses.

‘We need full transparency on all remuneration, performance-related or otherwise, and companies must clearly explain their decisions.

‘Water companies need to make charging decisions in line with our rules and we hold them accountable for those decisions.

‘We are currently reviewing companies’ charging decisions and will not hesitate to take action where we find our rules have been breached.’

A spokesman for United Utilities said: ‘None of the fees paid to our managing directors are paid by customers.

‘As we invest over £13bn in infrastructure by 2030, supporting 30,000 jobs, it is vital we have leaders with the right skills to lead the largest FTSE 100 company in the North West.

‘That’s why our new policy includes timed and targeted retention payments to ensure we have the right people to deliver to customers and the environment.’

A Yorkshire Water spokesman said: ‘Last year we made a commitment to be open and transparent about executive pay from Kelda. Accordingly, we summarized the payments received by CEO Nicola Shaw in our annual report.​

‘Our shareholders made these payments in recognition of the work carried out by Yorkshire Water directors to bring new investors into the business who are committed to our plans and will join our other shareholders to invest £600 million into the business before March 2027. Ofwat reviewed our approach to these payments last year. ​

‘As we have previously stated, we think it is right that this work should be paid for by shareholders, not Yorkshire Water customers, and we are committed to being transparent about remuneration and following the FTSE100 reporting approach for executive pay.’

The Daily Mail has approached Water UK, Northumbrian Water, Anglian Water and Wessex Water for comment.