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26
Feb
Yorkshire Water CEO defends £371k bonus amid criticism over pollution failures
The chief executive of Yorkshire Water has defended her £371,000 bonus despite criticism over sewage overflow failures and a downgrade in its environmental performance.
Nicola Shaw appeared before MPs on the House of Commons environment, food and rural affairs select committee yesterday (February 25), where she was questioned over the company’s performance.
The company has been criticised for its failure to manage wastewater treatment works adequately and for discharging untreated sewage into rivers.
Politicians have also questioned why Ms Shaw was still accepting a financial bonus at a time when Yorkshire Water was in the public spotlight for performing poorly.
In the last financial year, Ms Shaw was paid £585,000 in salary plus £72,000 in additional benefits, and accepted a bonus of £371,000.
However, in August last year, the company was fined £47 million for repeated failures over management of wastewater treatment sites which in turn led to excessive spills into local rivers.
Tim Roca, Labour MP for Macclesfield, asked Ms Shaw whether she felt the money she received was a “fair approach to renumeration”.
Ms Shaw said:
My shareholders and the board of Yorkshire Water decided through their renumeration committee to set us really stretching targets for a number of things. In particular, we improved and continued to improve on leakage and in relation to our staff engagement and staff safety and they wanted to reflect that in what had been quite a difficult year.
But they also recognised that we had done nowhere near well enough in relation to our outcomes in the environment and therefore removed any bonus related to the environment. But I do accept that it is a large number.
Mr Roca pointed out that customers may see the bonus as a matter of value for money at a time when they face a 41% hike in bills this coming year.
He added that after receiving a bonus, Ms Shaw had defended an increase in customer bills because “shareholders wanted to make sure you were kept incentivised”.
The Macclesfield MP said:
Were you not incentivised with the £657,000?
Ms Shaw said the company’s board had decided through its renumeration committee that executives should be “really focused on particular metrics”.
‘Unacceptable and disappointing record’
Meanwhile, Alistair Carmichael MP, Liberal Democrat chair of the committee, pointed out that the Environment Agency downgraded Yorkshire Water for its environment performance in July 2024.
The company was downgraded from three stars to two for an “unacceptable and disappointing record”. It was also rated red for pollution incidents.
Alistair Carmichael MP.
Mr Carmichael asked Ms Shaw how she rated Yorkshire Water’s performance and how it intended to improve.
She said:
I don’t disagree with them. It’s not the performance that we want. We need to improve and that’s why we have been investing heavily in the network and will continue to do so in the next five years.
She said the company had invested £180 million over the last two years in its infrastructure and had made improvements in areas such as leakage.
Mr Carmichael asked Ms Shaw whether she expected the company to still be rated red for environmental pollution this year.
She said she still expected to be rated red and admitted it would “take us a while” to improve on the rating.
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