Nine water companies have been banned from using bill payers’ money to fund “undeserved” bonuses for their bosses.
Industry regulator Ofwat has stopped water companies paying out £6.8 million in bonuses using customer money.
Debt-laden Thames Water is one of three firms – including Yorkshire Water, and Dwr Cymru Welsh Water – which were directly blocked from allowing customers to pay £1.55 million of bonuses.
The watchdog said a further six companies had voluntarily decided not to push the cost of executive bonuses worth a combined £5.2 million onto customers, with shareholders instead paying.
James Wallace, CEO of River Action, said: “Yesterday’s news that nine water companies will not be able to use customer money to fund bonuses is overdue.
“It is about time Ofwat put an end to water company CEOs enriching themselves at the expense of hard-pressed bill payers.
“It is long overdue to confront the corporate greed plaguing water companies – businesses that have consistently failed to safeguard our rivers, seas, and lakes.
“This underscores the chronic failure of environmental regulators, which stems from decades of deregulation and enabling water companies to prioritise executives and investors over public service and environmental protection.”
Undertones star and water campaigner Feargal Sharkey slammed Ofwat for “trying and failing” to divert attention away from “the fact that its regulation of the water industry has failed”.
He said Ofwat has “lost the plot”, adding that water firms will begin “massively increasing” CEO’s basic salaries.
Mr Sharkey said: “I don’t see anything here that’s actually going to deal with the real underlying belly of the greed, the financial engineering and the sheer incompetence of these companies.”
Water firms paid out a total of £9.3 million in executive bonuses over the last financial year, Ofwat revealed.
In a separate report from the regulator, it also said that £1 billion was paid out in dividends to shareholders in water firms over 2023-24, while 10 companies were placed onto its financial watch list.
David Black, chief executive of Ofwat, said: “In stopping customers from paying for undeserved bonuses that do not properly reflect performance, we are looking to sharpen executive mindsets and push companies to improve their performance and culture of accountability.
“While we are starting to see companies take some positive steps, they need to do more to rebuild public trust.”
Ofwat said it would be able to block bonus payouts entirely under the new water Bill being brought by the Government.
Mr Reed said: “It is disgraceful that half of water companies have given out unjustifiable and unmerited bonuses.
“That is why this Government is introducing urgent legislation to ban the payment of unfair bonuses to polluting water bosses so payouts of this kind can never happen again.”
Mr Black also said that water bills will likely go up by more than initially expected despite the pollution plaguing the nation’s rivers and seas.
Water firms have asked Ofwat to grant steep hikes in customer bills for the five years to 2030 despite performance issues.
Ofwat is expected to confirm in December how much it will allow them to increase their bills by over the period.
Liberal Democrat environment spokesman Tim Farron MP said: “Customers have been forced to watch whilst filthy sewage wrecks their local environment as they pay through the nose for the pleasure.
“Once again the regulator is proving itself utterly unfit for purpose.
“The whole industry needs to be ripped up from top to bottom, overseen by a new regulator with real powers to clamp down on these polluting firms.”
