To ask Her Majesty's Government what plans they have to require private water companies to link executive pay to performance.
Answered on
8 March 2022
Ofwat set clear expectations in the 2019 price review that required water companies to improve their corporate and financial behaviours, including through transparency about how executive performance pay and dividends relate to services for customers. Ofwat's expectations for companies on performance related pay were reflected in Ofwat's Board leadership, transparency and governance principles (copy attached to this answer), updated in April 2019, and companies' licences now require them to meet the four overarching objectives of these principles.
Ofwat's interim CEO recently wrote (copy attached) to water company remuneration committee chairs to reiterate the expectations on their approach to performance related executive pay for 2021-2022. We have made clear through our Strategic Policy Statement that we expect water companies to make improvements in water quality as a priority. If water companies do not meet their obligations we, and our regulators, will take swift action.