Water company executives in England and Wales have received significant pay increases over the past year despite a government-imposed ban on bonuses intended to curb excessive remuneration amid public concern over pollution and rising water bills. For the year ending March 2026, the total reported pay for chief executives and chief financial officers in the sector rose to £25.3 million, up from £24.9 million the previous year, marking the second consecutive year of pay growth despite the bonus restriction.
Leading the increases, Louise Beardmore, CEO of United Utilities, earned £2.5 million—more than £1 million above her prior salary—while Mark Thurston, CEO of Anglian Water, received £1.9 million, which included a £500,000 retention payment. Anglian Water, which serves nearly seven million customers in the east of England, stated that this retention payment was funded by shareholders for work conducted outside the regulated company and was not linked to the company’s performance, thus not falling under the bonus ban. Similarly, Yorkshire Water’s parent company, Kelda Holdings, paid its chief executive Nicola Shaw an additional £600,000 on top of her fixed salary of £732,000, a payment the company asserted was unrelated to performance.
The government introduced the bonus ban in 2025 targeting companies responsible for the most serious pollution incidents or those experiencing financial difficulties, as part of an effort to restore public trust in the water sector. However, several companies have reportedly used alternative forms of remuneration—such as retention payments and other awards—to maintain or increase executive earnings, complicating enforcement efforts.
Critics argue that these practices undermine the spirit of the ban. Gary Carter, a national officer with the GMB union, described these maneuvers as damaging to the reputation of private water companies, which are seen as prioritizing executive pay over delivering clean water and maintaining infrastructure. Environmental and political figures have also highlighted ongoing issues with pollution and water shortages, noting that about 23 million people in Britain are currently subject to hosepipe bans amid ongoing drought conditions.
Andrew Speke, interim director of the High Pay Centre, said the current measures do not go far enough to curb excessive pay, emphasizing that restricting bonuses alone is insufficient if overall remuneration remains unchanged through other means. He suggested that if Thames Water enters public ownership amid its financial struggles, it could serve as a model for improved corporate governance and pay practices in the sector.
The water regulator for England and Wales, Ofwat, is expected to announce which companies will be subject to the bonus ban later in the year. Meanwhile, the Department for Environment, Food and Rural Affairs has reiterated its stance, warning that any attempts to circumvent the ban are unacceptable. Water UK, the industry body representing water companies, declined to comment on the issue.
The developments come amid heightened scrutiny of the water industry, which has faced criticism for repeated sewage spills, infrastructure underinvestment, and sharp bill increases designed to fund catch-up repairs and new projects. The recent heatwave and resulting hosepipe bans have further intensified customer frustration, prompting calls from government officials, including Prime Minister Andy Burnham, for greater oversight and potentially increased public control over the sector.