Concerns have been raised about water companies finding ways to reward their executives despite a ban on bonuses. The chief executive of Anglian Water, Mark Thurston, received a £500,000 “retention” payment on top of a total package of nearly £1.86 million last year. Additionally, he received over £450,000 this month through another scheme.
Last year, legislation introduced by the Labour party aimed to prohibit bonuses for water companies that do not meet environmental standards. Environment Secretary Emma Reynolds stated that measures would be taken to prevent any form of bonuses being given.
Anglian Water faced a penalty of nearly £63 million last year for failing to manage its treatment works and network properly, resulting in sewage flow issues. The company was responsible for 12 serious pollution incidents, an increase from seven in the previous year, despite having a target of zero incidents. It was also fined for leaks and supply disruptions.
Despite supplying water to seven million customers, Anglian Water plans to raise customer bills by 44% between 2024/25 and 2029/30.
The company clarified that Mr. Thurston did not receive a bonus but rather a retention fee to ensure his continued presence until January of the following year. This fee was deemed necessary to retain the high-quality leadership that had been recently recruited.
Anglian Water emphasized that the payments to Mr. Thurston were related to his broader role within the Anglian Water Group, which includes various commercial activities generating around £800 million in revenue annually.
Ofwat is expected to scrutinize these payments as part of a broader examination of executive pay across water companies. Last year, Ofwat blocked over £4 million in potential bonuses for water company executives using its new powers.
Ms. Reynolds expressed discontent over the payments, stating that they contradict fairness and that action would be taken to prevent any form of bonuses. This comes after criticism of Chris Weston, the CEO of Thames Water, for justifying his pay increase to nearly £1 million despite the company’s financial struggles.
Mike Keil, CEO of the Consumer Council for Water, emphasized that customers would be outraged if water companies were found to be evading bonus payment regulations, expecting regulatory intervention if such evidence emerged.
