Welsh Water bosses latest to waive bonuses

The executive directors of Welsh Water will not take their bonuses this year, Utility Week can reveal.

The company’s chief executive Peter Perry and chief financial officer Mike Davis have joined the growing number of water company bosses to relinquish their annual bonuses. Last year Perry received £232k on top of his annual salary, bringing his total remuneration to £675k.

South West Water, Thames and Yorkshire all declared their leaders would turn down bonus payments this year.

It comes in response to growing public anger relating to environmental performance of water companies, with executive pay increasingly in the spotlight.

Elsewhere, a Southern Water spokesperson said Lawrence Gosden, who joined the company as chief executive last July when Ian McAulay stepped down, would only receive a bonus if performance targets were achieved.

“Just like our customers, we care deeply about the health of our rivers and seas, so we’re investing significant money and resources, building bigger infrastructure, using innovative technology and natural solutions, to improve it,” the spokesperson said.

“In our CEO’s first year of leading this vital work, if any bonus payments are paid, they will be linked to clear environmental, customer service and performance targets, with detailed information available in our annual report.”

Last year, McAulay was awarded £435k as an annual bonus as well as an exceptional bonus of £435k related to the acquisition by Macquarie.

Likewise, United Utilities’ chief executive Lou Beardmore – who has only been in the role for five weeks – will also only take a bonus linked to performance. A United Utilities spokesperson added: “[Beardmore] has made clear that her bonus must be linked to delivery. As a result, around one third of her future bonus will be linked directly to improving river health and achieving other stretching environmental targets.”

The remuneration committees of both Anglian and Wessex Water have yet to meet and make recommendations on bonuses. While Severn Trent declined comment on decisions on bonus payments.

Wessex faced criticism last month for remuneration decisions for 2021-22 that included awarding £200k of bonuses to four members of the executive team.

Research published last week indicated that the majority of the public (85%) believe water company bosses should forgo their bonuses if environmental targets, especially around sewage pollution, are not met.

Over the weekend, Yorkshire, Thames and South West announced their chief executives would not accept bonuses this year – with South West redirecting the funds to a customer support scheme.

South West said: “We can confirm that our CEO, Susan Davy has chosen to forego her bonus this year. Instead, the money will be invested into our unique WaterShare+ scheme which goes directly to our customers, giving them the choice to own shares in Pennon and a say in the running of our business or to take a credit on their bill. Susan and the Board feel this is the right thing to do and is further evidence that we are taking action to prove we are listening to our customers (alongside the work we are doing with WaterFit Live). Susan has said: “I want South West Water focused on delivering for customers, communities and the region, with no excuses”.

Meanwhile Yorkshire’s Nicola Shaw, who has led the company since May 2022, said: “I understand the strength of feeling about the issues linked to river health which is why I’ve decided that this year I won’t be accepting a bonus.

“This is the right thing to do, and I’m committed to improving Yorkshire Water’s performance. Our turn-around plan is already underway: our Environmental Performance Assessment (EPA) has improved to a 3* company, we are tunnelling a huge new sewer for Ilkley, and we’ve started an additional £180 million programme of work to improve our storm overflows in the region. Alongside this, we’re building plans for our biggest environmental programme since privatisation.”

Thames Water’s Sarah Bentley spoke publicly on the issue of herself and chief financial officer Alastair Cochran not accepting performance-related pay.

She said: “We are a relatively new team executing an eight-year turnaround plan to transform Thames Water and we have taken some important steps forward this year. I am proud of the work my team is doing in starting to address the poor state of our asset base and unacceptable standards of service for our customers.

“Nevertheless, the turnaround plan is not yet where I want it to be primarily due to significant headwinds from extraordinary energy costs, coupled with two severe weather events. These have hit our customer and environmental performance. Against this backdrop it simply doesn’t feel right to take my bonus this year.”

Last year, Bentley’s performance related pay was worth £496k.