Water regulator Ofwat has unveiled plans to prevent customers from funding executive bonuses that have not been earned through the company’s performance.

The regulator will regularly review all executive director bonus payments and expects remuneration committees to consider performance for customers and the environment when awarding bonuses.

Ofwat’s latest proposals are part of a programme aimed at linking board-level financial decision-making to company performance.

Ofwat’s review of company decisions on pay awards will cover factors such as environmental performance, delivery for customers, overall financial health and compliance issues.

Water regulator’s Chief Executive David Black has criticised the misalignment between executive bonuses and company performance, stating that it damages customer trust.

Black confirmed that Ofwat’s new proposals to review all executive director bonus payments are part of the regulator’s ongoing work to hold companies more accountable for their actions, alongside new rules on dividend payments.

Article source: https://www.energylivenews.com/2023/03/31/ofwat-to-crack-down-on-water-company-executive-bonuses/