The move affects three quarters of the total executive awards proposed across the industry amid public outrage over sewage spills and rising bills
The watchdog said it had stepped in to stop water companies that cannot show that bonuses are sufficiently linked to performance from using customer money to fund the payouts.Debt-laden Thames Water
Ofwat said new rules on water company bonuses and dividend payouts to shareholders were “beginning to bite” in their first full year since being introduced. Payouts worth £616,000 and £163,000 had been in the pipeline for top bosses at Yorkshire Water and Dwr Cymru Welsh Water respectively. “But there are deeper issues that need long-term solutions, which is why we have launched the largest review of the sector since privatisation.”
Some £1bn was paid out in shareholder dividends in 2023-24, though this was £400m less than the previous year thanks to a “clearer link” to performance, according to a report released by the regulator. A further seven companies have been declared as having an “elevated concern” over their financial resilience, while six firms are deemed to be “standard”, with no specific concerns over their financial health.“Through these new rules, our enforcement action and our incentive regime, which has imposed £430m in performance penalties since 2020, we are challenging companies to deliver improvements for both customers and the environment.
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