‘I want loopholes closed’: Water company bonus ban to be reviewed by Government

Dame Angela Eagle said: “People are sick of seeing water bosses profit while rivers are polluted and customers are repeatedly let down.”

Yorkshire Water has been the subject of a bonus ban for the last two years, over poor pollution performance.

Last month, it received a one-star rating from the Environment Agency over this, the lowest score possible.

Over the last three financial years, outgoing Yorkshire Water chief executive Nicola Shaw was paid an additional £660,000 from Yorkshire Water’s Jersey-registered parent company Kelda Holdings.

This was only revealed by The Guardian last summer, and meant her overall remuneration across that period totalled £4.4m.

Yorkshire Water has repeatedly denied this was a “back-door bonus”, despite Ms Shaw having no set hours or responsibilities for the work conducted for Kelda Holdings.

Ofwat subsequently ruled the payments did not fit its definition of a performance-related pay bonus but called on the company to show greater transparency on executive pay.

The Yorkshire Post understands that new chief executive Nicola Mendalova will not receive the off-shore payments.

The Department for the Environment, Food and Rural Affairs (Defra) said the bonus ban review was not triggered by any specific company or person.

An Ofwat assessment released yesterday noted the growing use of so-called retention payments and substantial increases in base pay “without sufficient explanation or supporting evidence”, which it said could create a perception that companies are circumventing the rule and damage public trust.

Dame Angela added: “A wide-ranging review launching today will ensure that failure doesn’t pay, whatever name the payment goes by.

“The bonus ban was the first step. Where there are loopholes, I want them closed.”