Top executives at UK water companies received £25.3 million in pay last year—an increase despite pollution scandals, government bonus bans, and rising customer bills. The raises, reported by firms for the financial year ending March 2024, come as regulators tighten rules on executive compensation linked to environmental and financial performance.

Public anger has grown over sewage discharges into rivers and seas, aging infrastructure, and sharp bill hikes. Yet some water bosses saw seven-figure pay increases, including "retention payments" and allowances that companies argue fall outside bonus restrictions. Regulator Ofwat now has the power to block bonuses for firms breaking pollution rules, with decisions on which companies face bans expected this autumn.

Who Got the Biggest Pay Raises?

Louise Beardmore, CEO of United Utilities, earned £2.5 million—over £1 million more than the previous year. The FTSE 100 firm, which does not expect to fall under the bonus ban, gave her a £435,000 "annual allowance" and a fixed pay increase to £971,000. The company said the money came from shareholders and had no performance requirements.

Mark Thurston, CEO of Anglian Water, received £1.9 million, including a £500,000 "retention payment" despite the bonus ban. The firm, which confirmed it would be subject to the ban, paid most of his compensation through its parent company. Anglian Water said the payment was not tied to performance and was funded by shareholders to maintain leadership.

  • Nicola Shaw, CEO of Yorkshire Water, got £600,000 on top of her £732,000 salary, paid by the parent company.
  • Ruth Jefferson, CEO of Wessex Water, received a 14% salary hike despite the firm being barred from bonuses.
  • Heidi Mottram, CEO of Northumbrian Water, was given a £300,000 "retention payment."

Regulators and Critics Push Back

Ofwat, the water industry regulator, said it blocked £4 million in potential bonuses last year and requires full transparency on executive pay. "Rebuilding public trust is vital," a spokesperson said. "We will take action where companies breach our rules."

A Department for Environment, Food and Rural Affairs (Defra) spokesperson called attempts to circumvent bonus bans "completely unacceptable" and said the government would tighten rules if needed. Ofwat is reviewing remuneration decisions and will announce which firms face bonus bans later this year.

Critics argue the pay hikes show the current system is broken. Andrew Speke of the High Pay Centre said the figures prove "government measures have not gone far enough." Gary Carter of the GMB union called the payments "money-grabbing" and urged more public control over water companies.

What Happens Next?

Ofwat will finalize its list of firms subject to bonus bans this autumn. Companies found responsible for serious pollution or financial failings could face retrospective penalties. Meanwhile, water firms say the pay is necessary to retain top talent as they invest billions in infrastructure upgrades.

United Utilities, for example, is spending £13 billion by 2030 to improve pipes and treatment works. A spokesperson said none of its executive pay comes from customer bills. Yorkshire Water said its CEO’s extra payments were for securing new investors, not performance, and were funded by shareholders.

Wessex Water said its CEO’s 14% raise reflected the role’s expanded responsibilities. Thames Water, which paid £4.1 million in bonuses to senior staff not covered by the ban, has not yet commented. Regulators and lawmakers will be watching closely as the industry faces growing scrutiny.