Nicola Shaw receives a pay award despite significant sewage pollution failures by the water utility.
Yorkshire Water awarded its chief executive a £1.03 million pay package despite significant disruptions to water supplies and severe sewage pollution failures.
Nicola Shaw, the CEO, received a base salary of £585,000 and a total pay package of £1.03 million, which includes a £371,000 bonus—42.2% of the maximum allowed—according to the 2023-2024 annual report published this week.
Last year, Shaw did not receive a bonus and earned £718,000 for the 10-month period after joining in May 2022.
The payout follows criticism from the regulator in April after a burst water pipe severely limited water supply for two weeks late last year, affecting 12,700 households and leaving customers struggling with inadequate support such as bottled water.
The new Labour government announced plans in Wednesday’s King’s Speech to hold water company executives personally criminally liable for violations of water quality laws. The bill will also grant Ofwat new powers to ban bonuses if environmental standards are not met.
In its annual report, Yorkshire Water acknowledged its underperformance and highlighted several serious pollution incidents. Environment Agency data indicated it was the second-worst company for sewage spills last year and downgraded its environmental performance rating from three to two stars.
Shaw, formerly the CEO of the HS1 high-speed railway line, will also receive undisclosed pay from her roles at Kelda Holdings, Yorkshire Water’s Jersey-registered parent company. Additionally, she serves as a non-executive director at International Airlines Group.
Kate Bayliss, an academic and water expert at the University of London Soas, criticized water companies, stating they are “clearly not reading the room” amid public outrage over their performance, particularly as these pay packages are funded by customer bills during a cost of living crisis.
“There is no evidence that higher CEO salaries lead to better environmental and social outcomes,” she added.
Ofwat has provisionally agreed to a 25 percent increase in bills for Yorkshire Water customers, potentially raising annual household payments to £537 by 2030 from the current £430. A final decision will be made by December as part of the regulator’s five-year settlement with water companies.
Yorkshire Water paid £84.1 million in dividends within the group structure, up from £62.3 million over the previous 12 months.
The company stated that its “ultimate shareholders have not received a dividend for the last eight years.” Its owners include the Singaporean wealth fund GIC, Corsair Infrastructure Management, DWS, and SAS Trustee Corporation.
Other water companies have also paid out bonuses. Thames Water awarded its new chief executive Chris Weston a £195,000 bonus and total pay of £437,000 for the three months to the end of March.
Severn Trent chief executive Liv Garfield received a £584,000 bonus and total pay of £3.2 million in the year to the end of March, while Southern Water chief executive Lawrence Gosden received a £183,000 bonus for the year to March 31, increasing his total pay for the year to £764,000.
Yorkshire Water said its bonus scheme considers “customer service and environmental measures, as well as the overall performance of the business.”
“Over the past year, we’ve been making great strides to improve our performance as a company, and the hard work is starting to pay off,” the company stated.
