Watchdogs are investigating whether water companies are finding ways to bypass a ban on bonuses, following a situation where a top executive received a £500,000 reward for remaining in the position. Mark Thurston, the CEO of Anglian Water, received this “retention” payment as part of a nearly £1.86 million package for the previous year, in addition to over £450,000 from another program this month.
Despite regulations introduced by the Labour party last year to prohibit bonuses for water firms failing to meet environmental standards, Anglian Water granted these substantial payments. Environment Secretary Emma Reynolds emphasized the need to take action to prevent any form of bonuses.
Anglian Water faced a hefty penalty of close to £63 million last year for inadequately managing its treatment facilities and network, leading to sewage flow issues and multiple serious pollution incidents. The company also received fines for leaks and supply disruptions.
The company, serving seven million customers, plans to raise customer bills by 44% between 2024/25 and 2029/30. Anglian Water defended the payments to Mr. Thurston, stating that they were retention fees necessary to retain high-quality leadership recently recruited. The company clarified that these payments were related to Mr. Thurston’s work for the broader Anglian Water Group, not just the water supply business.
Ofwat is anticipated to review these payments as part of a broader assessment of executive pay in water companies. Last year, Ofwat used new powers to block over £4 million in potential bonuses for water company executives. Ms. Reynolds expressed dissatisfaction with such payments, emphasizing the need for fairness and public accountability.
The controversy extends to Thames Water, where CEO Chris Weston defended a substantial pay rise to nearly £1 million despite the company’s financial struggles. The Consumer Council for Water CEO, Mike Keil, emphasized that customers would be outraged if any water company was found to be skirting bonus regulations, calling for regulatory intervention if such evidence emerges.
