Introduction to the Water Industry Investigation
The Watchdog of the Water Industry is examining payments to the bosses of a series of suppliers after the offshore mother company of Yorkshire Water handed over its Chief Executive more than 1 million GBP to previously unmentioned fees.
Background of the Investigation
OFWAT, which is to be abolished by the government in the coming years, wrote to a number of water companies at the beginning of this month to check similar remuneration arrangements as with Yorkshire Water and its holding company Kelda Holdings. Industry sources said that some of the largest operators of the sector were among the recipients of OFWAT’s letter.
Details of the Payments
According to reports, Nicola Shaw, the Yorkshire Water boss, has been paid over 660,000 GBP in the last two financial years by Kelda, a Jersey-registered company. This payment has raised questions about the remuneration arrangements in the water industry.
OFWAT’s Response
A source near OFWAT insisted that their investigation is planned to examine similar salary agreements before reporting on the remuneration of Ms. Shaw. OFWAT stated that they are currently examining compliance with the performance-related Pay Prohibition rule by water companies. As part of this assessment, they wrote to several companies to request further information on the remuneration decisions that they have determined in their annual accounts.
Potential Consequences
If OFWAT finds evidence that a company has violated the rule, they have the power to direct companies to take remedies. If these remedies are not adhered to, companies can be confronted with assertive measures, including financial punishments.
The Water Industry Under Fire
The content of the water industry has become an increasing fire topic in the past few months, since they have been raised against operators across Great Britain throughout the UK because they do not prevent any leaks and greater pollution incidents. The government’s decision to scrap OFWAT has also raised questions about the future of the water industry and its regulation.
