The head of the regulator Ofwat David Black has said that bosses of water companies who dump sewerage into the UK’s waterways should not receive any bonuses.
Black wrote in a letter to company boards that must ensure their chief executives do not receive a “reward poor performance” if their firms dump sewerage.
Black wrote and sent the letter on Friday, which says, “Companies’ performance in some areas, most notably on the environment, risks eroding trust and confidence in the sector.
“We therefore expect companies to ensure that these outcomes are reflected in performance-related pay for executive directors, including recognition of poor performance and any non-compliance with regulatory and statutory obligations.”
Black added, “In a regulated sector such as water, we would expect to see clear evidence that this is happening as a matter of course; for example, that you have discretion to recognise shortfalls that become apparent during the year, whatever the initial framework for incentives.
“Given the current concern about environmental performance, including the current investigations into compliance with environmental permits, we urge remuneration committees to give particular consideration to the clarity of reasoning for any awards made in this area.”
The Environmental Audit Committee found in January that just 14% of waterways in England meet the ecological status.
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