UK water executives bypass pollution bonus ban via parent companies
British water companies are circumventing a government bonus ban imposed over sewage spills by increasing base salaries and routing payments through parent companies, exposing a regulatory gap in England's privatized utility model.
Ruth Jefferson, chief executive of Wessex Water, received a 14% base salary increase in October, bringing her pay from £590,000 to £670,000. This hike far outpaced the 3.5% raise given to the company's workers and places her earnings at 18 times the median employee's pay. The increase occurred despite a 2025 government ban on bonuses for water companies responsible for serious pollution.
Jefferson’s total compensation reached £791,000 when including pension and other benefits. Wessex Water, which supplies 2.9 million customers and is ultimately owned by a Jersey-incorporated arm of Malaysia's YTL group, acknowledged it would trigger the bonus prohibition due to environmental and operational failures. A company spokesperson said the salary adjustment brought her pay "closer to market benchmarks."
Other utilities have adopted parallel strategies. Anglian Water gave its chief executive, Mark Thurston, a £500,000 "retention payment" funded by its parent company to keep him until January 2027. Anglian argued the payment did not replace a bonus because it was not linked to performance and was paid from funds that would have otherwise gone to shareholders. Its annual report stated it had a "long-held, steadfast view that banning bonuses is not helpful."
Yorkshire Water similarly routed £660,000 to its chief executive, Nicola Shaw, through parent company Kelda Holdings. Following political and public criticism, the board admitted a lack of disclosure and promised future transparency. The regulator, Ofwat, has now stated it will force companies to reveal payments made by other group entities.
These compensation maneuvers are unfolding as the sector secures higher consumer tariffs to fund infrastructure. Wessex Water recently won approval to raise customer bills by 21% over five years.
“The government has tried to stop water company bosses giving themselves hefty bonuses, but they keep finding ways to sneak past the legislation and fill their pockets,” said Gary Carter, a national officer at the GMB union. “The onus must be on ministers and the regulator to find a way to stop them.”
