# Water regulator tightens bonus ban as firms dodge rules

> Ofwat accelerates review after water companies use retention payments and base pay rises to circumvent the bonus ban introduced to restore public trust.
- Title: Water regulator tightens bonus ban as firms dodge rules
- Summary: Ofwat accelerates review after water companies use retention payments and base pay rises to circumvent the bonus ban introduced to restore public trust.
- Keywords: water industry, bonus ban, ofwat, anglian water, thames water, executive pay, retention payments, public trust, environmental pollution, the Guardian
- Source: the Guardian — https://theguardian.com/business/2026/nov/12/water-industry-bonus-ban-tightened-ofwat
- Published: 2026-11-12T07:59:52+00:00
- Read time: 1 min
- Topics: water industry, bonus ban, ofwat, anglian water, thames water, executive pay, retention payments, public trust, environmental pollution, news, world
## Nine water firms banned from bonuses
Ofwat announced on Thursday that nine water companies in England and Wales, including Thames Water and Yorkshire Water, were banned from paying bonuses for the two thousand twenty-five to twenty-six financial year.
## Companies dodge ban with retention payments
Water company bosses' pay has risen despite the bonus ban, according to Guardian analysis. Companies are circumventing the ban through retention payments and base pay increases that are not performance-related but effectively replace banned bonuses.
## Anglian Water singled out for criticism
Anglian Water was criticised for retention payments worth up to eight hundred thousand pounds for chief executive Mark Thurston despite the bonus ban.
## Other firms' controversial payments revealed
Ofwat highlighted potential retention payments of one million pounds for Thames Water's chief financial officer, one point five million for Northumbrian Water chief executive Heidi Mottram, and one point seven million for Louise Beardmore at…
## Regulator accelerates review of bonus rules
Ofwat said it would accelerate a review into the rules over concerns that companies were deliberately undermining the ban.The review will consider whether payments from water companies' parent companies should be included in the ban.

> The growing use of fixed so-called 'retention payments' and substantial increases in base pay without sufficient explanation or supporting evidence risks damaging public trust and creating a perception that companies are circumventing the rule.
## Environment secretary demands loopholes closed
Angela Eagle, the environment secretary, said she wanted to close loopholes so that failure does not pay. She said the bonus ban was the first step and where there are loopholes, she wants them closed.

> People are sick of seeing water bosses profit while rivers are polluted and customers are repeatedly let down.
## Ofwat warns of damage to public trust
Helen Campbell, interim executive director for delivery at Ofwat, said it is disappointing that so many companies continue to trigger the rule through serious performance failures.
## Key takeaway

Ofwat is tightening the water industry bonus ban after companies used retention payments and pay rises to circumvent rules meant to restore public trust.