Regulator Blocks Executive Bonuses from Customer Funds

Nine water companies, including Thames Water, will not fund £6.8M of executive bonuses from customer bills due to Ofwat's new regulations. The regulator stopped this practice at companies like Thames Water, amid its debt crisis, pushing for better company performance and accountability.

Nine water companies, including the crisis-afflicted Thames Water, will no longer channel customer bill funds to cover £6.8 million in executive bonuses, as per the directives of regulator Ofwat's newly instituted rules announced on Thursday.

Leveraging its fresh authority, Ofwat has explicitly obstructed Thames Water, Yorkshire Water, and Dwr Cymru Welsh Water from allocating £1.5 million worth of customer-funded bonuses, arguing these payments inadequately matched the firms' performances. Teetering on potential renationalization, Thames Water struggles with a debilitating £15 billion debt and subpar performance metrics.

The company's chief executive, Chris Weston, who commenced his role in January, received a £195,000 bonus for his inaugural three months. According to Ofwat, the remaining six companies opted voluntarily against offloading the £5.2 million bonus cost onto customers. Ofwat's chief executive, David Black, emphasized that halting the use of customer bills for unjust bonuses will enhance executive accountability and propel companies toward improving performance and transparency. Shareholders or lenders will now bear the burden of bonus payments.

(With inputs from agencies.)