Overall reported pay for chief executives and chief financial officers at English and Welsh water companies increased by 1.5% to £25.3m in the last financial year. This marks the second consecutive year that a bonus ban has coincided with higher overall pay across the sector.
The Labour government introduced the Water (Special Measures) Act in 2025, which aimed to ban bonuses for polluting water bosses. However, the legislation only granted the regulator, Ofwat, powers to block performance-related bonuses, leaving other payments unaffected.
Following the publication of annual reports last month, it was found that salary increases, allowance awards, and retention payments have become more common. Thames Water's Chief Financial Officer, Steve Buck, received a delayed £1m signing fee at the end of July, in addition to his £591,000 pay for the financial year to March. The company also stated it has "entered into 14 agreements" to resolve liabilities for potential claims related to retention payments for other executives that were previously paused.
A spokesperson for the environment department described Thames Water's payments as "unacceptable," stating the company should focus on improving performance and rebuilding public trust. Ofwat's interim executive director, Helen Campbell, expressed concern last month that customer trust is harmed when remuneration committees make decisions that "give the appearance of circumventing the rule" or are not explained.
Ofwat is scheduled to conduct a review in the autumn to consider whether the rules should be strengthened.