Regulators are investigating whether water companies are avoiding a ban on bonuses after a top executive received a £500,000 reward for remaining with the company.
Mark Thurston, the CEO of Anglian Water, received a “retention” payment totaling nearly £1.86 million for the previous year, along with an additional £450,000 under a different scheme this month.
New legislation implemented by the Labour party last year aimed to prohibit bonuses for water companies that do not meet environmental standards.
Despite this, Environment Secretary Emma Reynolds stated that measures would be taken to prevent any form of bonuses being given.
Last year, Anglian Water faced a penalty of almost £63 million from regulator Ofwat for failure in managing its treatment works and network, resulting in sewage flow issues. The company was involved in 12 serious pollution incidents last year, an increase from seven incidents in 2024, despite having a target of zero. Additionally, the company was fined for leaks and supply disruptions.
Anglian Water, serving seven million customers, plans to increase customer bills by 44% between 2024 and 2030.
The company clarified that Mr. Thurston did not receive a bonus but was awarded a retention fee to ensure his continuation with the company until next year to maintain the quality of leadership in place. This payment was related to his broader role within the Anglian Water Group, not specifically the water supply business.
Ofwat is expected to review these payments as part of a broader examination of executive pay in water companies. Last November, Ofwat utilized its new powers to block over £4 million in potential bonuses for water company executives in the previous financial year.
Ms. Reynolds criticized the payments as unfair and stated that steps would be taken to prevent any form of bonuses. She emphasized the importance of fairness and transparency in executive compensation.
Concerns were raised over Chris Weston, the head of Thames Water, who defended his salary increase to nearly £1 million while the company faced financial difficulties. Mr. Weston’s annual salary rose from £869,000 to £995,000, with no additional bonus received.
Mike Keil, CEO of the Consumer Council for Water, expressed that customers would be outraged if any water company was found to be bypassing bonus regulations, expecting regulatory intervention if such actions were uncovered.