PARLIAMENTARY WRITTEN QUESTION
Water Companies (21 September 2022)

To ask the Secretary of State for Environment, Food and Rural Affairs, whether he has made an assessment of the adequacy of the level of (a) executive pay and (b) shareholder dividends at private water companies.

Asked by:
Navendu Mishra (Labour)

HM Government and Ofwat have set an expectation that companies must be transparent about how performance-related executive pay and dividends are linked to services for customers, including environmental performance.

David Black, Ofwat Chief Executive, recently reiterated that "performance-related pay for CEOs should be clearly linked to their performance for customers, the environment and society. Performance-related pay can't be a one-way street, if companies are not performing that should be reflected in executive pay."

Ofwat is currently consulting on improving financial resilience in the water sector. This includes modifying the dividend licence condition to require that dividend policies and dividends declared or paid should take account of service delivery for customers and the environment over time, including performance levels.

This will enable Ofwat to take enforcement action against companies that do not link dividend payments to performance, or those failing to be transparent about their dividend pay-outs.

Ofwat plans to report on an analysis it is completing of whether it feels companies have clearly made the link between performance and performance-related pay.

Answered by:
Trudy Harrison (Conservative)
11 October 2022