Ofwat consults on executive bonus ban
- by Verity Mitchell
- Mar 30
- 1 min read
Ofwat is consulting until 29 April on a Performance Related Executive Pay (PRP) Prohibition Rule. It was given new powers to ban water company executive bonuses under the Water (Special Measures) Act 2025.
The proposal is to prohibit PRP if a water company fails to meet any of the following key standards in a year:
Consumer matters – if Ofwat decides that a company has breached its principal statutory duty.
Environment – if a company has received a one-star rating in the Environmental Performance Assessment for the preceding year.
Financial resilience – if a company breaches its license requirement to hold a sufficient credit rating.
Criminal liability – if the company is convicted of any offences.
Of the four criteria, the first is the most subjective. Ofwat said the rule will apply at present only to regional water companies rather than New Appointments and Variations at this stage.
Ofwat intends to implement the rule for PRP paid from the first of April 2024 onwards.
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