Regulators are investigating whether water companies are finding ways to bypass a ban on bonuses after a top executive received a £500,000 reward for staying in his position.
Mark Thurston, the CEO of Anglian Water, received a “retention” payment amounting to nearly £1.86 million for the previous year. Additionally, he obtained over £450,000 this month through another scheme.
New legislation introduced by the Labour Party last year prohibits water companies from awarding bonuses if they do not meet environmental standards, yet Anglian Water still made these substantial payments.
Emma Reynolds, the Environment Secretary, has vowed to take action to prevent any form of bonuses being granted under different names.
Anglian Water faced a hefty penalty of approximately £63 million last year due to its failure to adequately manage its treatment facilities and network, leading to sewage flow issues. The company was involved in 12 serious pollution incidents last year, an increase from seven in 2024, despite having a target of zero incidents. In addition, it was fined for leaks and water supply disruptions.
Despite serving seven million customers, Anglian Water plans to raise customer bills by 44% between 2024/25 and 2029/30.
Anglian Water has clarified that the payment received by Mr. Thurston was not a bonus but a retention fee to ensure his continued presence until the following year. They emphasized that this fee, along with the payment from the “medium-term alignment plan,” pertains to his broader responsibilities within the Anglian Water Group, not just the water supply business.
The company highlighted that the executive and financial roles oversee operations across the wider Anglian Water Group, encompassing various commercial activities generating around £800 million in annual revenue. They asserted that these payments are not funded by customers but are disclosed to provide transparency on executive earnings, the purpose of the payments, and the source of funding.
Ofwat is anticipated to scrutinize these payments as part of a broader examination of executive remuneration within the water sector. The regulator recently used its new authority to block over £4 million in potential bonuses for water company executives in the previous financial year.
Emma Reynolds expressed disdain for these payments, citing them as unfair and asserting that the public has a right to be outraged. She reiterated the government’s commitment to preventing any form of bonuses being granted to executives in the water industry.
Following public outcry over Thames Water’s CEO, Chris Weston, defending his salary increase to nearly £1 million amid financial difficulties, consumer advocates have called for strict enforcement of bonus regulations to maintain fairness and accountability in the sector.