Dŵr Cymru halted from using customer cash to pay for £163,000 in bonuses
Nine water companies, including Dŵr Cymru Welsh Water, have been prevented from using customer money to fund “undeserved” bonuses for top bosses under new powers, the regulator has announced.
Ofwat said it had stepped in to halt water companies that cannot show that bonuses are sufficiently linked to performance from using customer money to fund the payouts, amounting to 73% of the total executive awards proposed across the industry.
Dŵr Cymru, which were directly blocked from allowing customers to pay £163,000 of bonuses, is among three firms – also including, debt-laden Thames Water and Yorkshire Water.
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 instead paying.
‘Underserved’
It added it would otherwise have moved to block the payouts.
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.”
Ofwat said new rules on water company bonuses and dividend payouts to shareholders were “beginning to bite” in their first full year since being introduced.
In blocking the awards, Ofwat will instead adjust costs for the companies so that they cannot recover it from customers.
It revealed that Thames Water – more than £16 billion in debt and at the centre of growing public outrage over pollution and rising bills – was planning to use customer cash to pay £770,000 in bonuses for its chief executive Chris Weston and chief financial officer Alastair Cochran.
Bonuses
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.
“But there are deeper issues that need long-term solutions, which is why we have launched the largest review of the sector since privatisation.”
‘Improvements’
A Dŵr Cymru spokesperson said: “Some of our operational performance is not as good as we or our customers expect, and we are working hard to drive the improvements needed.
“Our Business Plan for 2025-30 will be the company’s largest ever in our services – over £4 billion, with £2.5bn total in our wastewater and environmental services – subject to Ofwat approval.
“Today’s report recognises the comparatively low level of Dŵr Cymru’s annual performance related pay and that no long-term incentive payments were made last year, reflecting our poor performance in 2023/24.
“The performance related pay did, however, reflect other elements of good performance including strong customer service and financial performance.
“We will take the necessary action as outlined in Ofwat’s report.”
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Bonuses!!!!! This must be a ******* joke!! Paying bonuses for failure and underachievement is a two finger job to its customers.
Why should they get paid more for dumping sewage into rivers and the sea?
And blame the farmers…our river fish stocks are on a massive decline due to those who have the responsibility of dredging the rivers fail to carry this out.
therefore the silt builds up and when the fish go upriver they cannot spawn due to the silt.
Actually intensive chicken farming is to blame for declining fish stocks along with the water companies dumping sewage in our rivers.
Dredging (or the lack thereof) has nothing to do with it.
No doubt this post will get a load of down votes, because you mustn’t say anything bad about the good old farmers, those steadfast guardians of the countryside (not).
Traditional farming is not a problem it’s the industrial scale production of milk and chicken to meet the demands of the supermarkets that is killing our rivers.
Oh I agree, but too much of our food is produced on these so-called ‘farms’ (it’s actually more akin to factory production).
However, if the government tried to shut them down the NFU (or the rural contingent of the Tory party as I prefer to think of them) would immediately howl in outrage.
Absolute nonsense.
Bonuses in any sector should be performance related.
Should be no bonuses has they are paid to do the job…turn it around and reduce their money if they have not achieved what they were paid to do in the first place!
Incredible. Outrageous that any bosses should be getting any bonuses with such poor record and increase in charges coming.
I vividly remember from an indepth Dwr analysis by Paddy French a few years ago that Dwr was “paying bonuses to executives for getting a bonus”! A multiplier trick from a company that prides itself in a rosy Wales “integrity” flag for PR purposes. And as long as Steve Reed is conducting the orchestra at a UK Labour level, the tune will broadly remain the same, despite occasional wails. He’s yet again ruled out public ownership as “too costly” despite these companies being debt filled polluting hulks blatantly ripping off the public for their overseas owners and cheery asset managers.… Read more »
Seems incredible Dwr Cymru bosses were ever entitled to bonuses for failure.
The Dwr Cymru directors are:-
https://corporate.dwrcymru.com/en/about-us/governance/our-directors
Only the other day Dŵr Cymru was fined £24,000,000 for underachieving. They regularly tell us they have no money. Now this!! If there is spare cash/bonuses give it to the customers who have to put up with failure and a third rate service. Paying bonuses to staff is outrageous and a kick in the teeth to customers!! Dock their wages for each illegal spillage instead. Bonuses should not be paid until all leaks are repaired and no spillages. Oops there goes another. Give the man a bonus.
They are obviously not bonuses (like most in the high paid manegerial class) what it is is undeclared pay, it is a way of masking how highly paid they really are…
Also, if it isn’t going to come from customer payments, where else are they going to get it?
As it is a “not for profit” any bonus payments come out of customer bills, however you describe it.
The entire “not for profit” posture is exposed as a scam. Surpluses which would otherwise rank as profits get paid out in exec bonuses, extra fees to a host of advisers and consultants with a little bit extra into investment if they can’t top up their pension funds any more! This stinks almost as bad as the muck they release into rivers. While they are at it UK Government should reverse its relaxed attitude towards bonuses paid to banksters. That’s another bunch of sharp practitioners whose “added value” is open to question. Financial engineering may bump up the earnings of… Read more »
Many of Dŵr Cymru’s operations have been outsourced so some other company is taking a profit. These should generally be brought back in house.
It was privatized, bought, sold, asset stripped, loaded with billions in debt, and then the debt was offloaded to this ‘non profit’ construction, if it really was non profit, then we wouldn’t have any problems, truth is that actually customers are still paying off the debts which were created by the extraction of ‘profit’ by previous owners when there actually wasn’t any profit to be had, in essence the deal was “Now we have destroyed it, you can have the ruins back, as long as you agree to pay off the massive debts we have also run up in your… Read more »
Just like everything else that Thatcher and Major privatised then.
This claim of “not for profit” needs to be investigated. Hand over the books.
The CEO of South West Water one of the worst performers in England recently received a pay rise of £300k!