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06
Nov
Regulator blocks Yorkshire Water bonuses over pollution
Ofwat has blocked Yorkshire Water from paying bonuses over pollution incidents.
The regulator has blocked more than £4 million in potential bonuses as part of new rules on performance related pay.
Six companies — Thames Water, Anglian Water, Southern Water, United Utilities Water, Wessex Water and Yorkshire Water — were prohibited from making payouts, according to a regulator report.
The new rules, known as Performance Related Pay Prohibition Rule, mean companies are required to block annual bonuses and other awards to directors where they do not comply with the watchdog's rules.
In its report, Ofwat said:
All six companies correctly applied the rule. We estimate as a result that the companies prohibited more than £4 million of potential annual bonuses and other PRP to the relevant directors.
The move comes as it was revealed in August that Nicola Shaw, chief executive of Yorkshire Water, received additional payments from the firm’s parent company.
Ms Shaw received £660,000 from Jersey-based Kelda Holdings in the 2023/24 and the 2024/25 financial years, which was previously undisclosed.
Yorkshire Water said the payment was for work including "investor engagement, financial oversight, and management of the Kelda Group". It added that the fee was paid by shareholders, not bill-payers.
In its report, Ofwat said the payments made by the parent company fell outside of the scope of the performance rule.
It pointed out that Ms Shaw and other executives waived their bonuses for 2023/24.
It added that the company had since acknowledged it “should have disclosed more” about the payments and had taken steps to improve transparency, including disclosing the value of payments made to directors by the group.
The report said:
While greater transparency on executive remuneration is always welcome, we consider this should be the minimum of what should be expected of all water companies to follow. This is something we will be consulting to include in our planned updates to company reporting requirements on PRP for next financial year so that customers can clearly see what a director receives and why.
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