Nine water firms blocked from using customer cash to pay for £6.8m of bonuses
The regulator decided that bonuses should be paid by shareholders instead of customers unless they have been "earned", as ITV News' Martha Fairlie reports
Nine water companies will be blocked from using customer money to fund “undeserved” bonuses for top bosses worth £6.8 million, the water regulator has announced.
This includes debt-laden Thames Water, which currently faces a funding crisis and owes more than £16 billion - and planned to use customer cash to pay £770,000 in bonuses for its chief executive Chris Weston and chief financial officer Alastair Cochran.
The regulator Ofwat said it will use its new powers to stop companies from digging into customer money to pay bonuses which can't be sufficiently linked to performance - amounting to 73% of total proposed awards across the industry.
Yorkshire Water and Dwr Cymru Welsh Water are among the other firms affected, and along with Thames Water have been directly blocked from allowing customers to pay £1.5 million of bonuses.
Ofwat 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 paying instead.
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.”
In blocking the awards, Ofwat will instead adjust costs for the companies so that they cannot recover it from customers.
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Action was also taken against £616,000 worth of payouts for top bosses at Yorkshire Water and £163,000 of bonuses at Dwr Cymru Welsh Water.
Secretary of State for Environment, Food and Rural Affairs Steve 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."
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