UK water regulator Ofwat has revealed its assessment of executive pay in the water sector for 2022-23.
The report, which covers the 16 largest water companies in England and Wales, marks a step in Ofwat’s effort to address inappropriate payouts to executives.
This assessment precedes the introduction of a performance-related pay recovery mechanism, ensuring shareholders, not customers, bear the cost of executive bonuses if expectations are not met.
Following earlier consultation and public scrutiny, senior executives at six companies declined bonuses for 2022-23 and bonuses for executives at five other companies were funded by shareholders, not customers.
Ofwat encourages greater transparency and alignment in bonus decisions and targets, aiming to block customers from covering inappropriate executive bonuses from 2023-24 onwards.
The regulator emphasizes the need for transparency and criteria compliance and pledges to monitor bonuses annually.
