Ofwat director grilled on water bosses’ bonuses

MPS have criticised water companies appearing to evade bans on bosses’ bonuses as they grilled Ofwat about preventing payments from parent firms.

- REBECCA SPEARE-COLE

The Public Accounts Committee questioned the regulator about how “complex and opaque” corporate structures mean senior executives can still receive additional payments from unregulated parent companies.

Last year’s Water (Special Measures) Act allowed Ofwat to ban performance-related bonuses for bosses at utilities failing customers and the environment as part of the Government’s wider response to cracking down on the ailing sector.

However, some companies have already provoked public and political backlash by paying senior executives additional money in ways that appear to circumvent bans.

Thames Water sparked an outcry when it sought to hand out “retention payments” to bosses that were not covered by the ban.

Yorkshire Water's chief executive, Nicola Shaw, faced criticism when it emerged that she received £1.3 million in undisclosed payments from the parent company over two years.