During her tenure as Yorkshire Water CEO, Nicola Shaw faced plenty of controversy about the firm's performance.

She also faced criticism from MPs in January, when it emerged that she received £1.3 million in undisclosed payments from Yorkshire Water’s parent company over two years.

In July, in an interview with The Yorkshire Post, Ms Shaw confirmed she had received a further £660,000 from Yorkshire Water’s offshore parent company after the previously secret payments caused huge controversy last year when they were exposed.

The company’s chief executive insisted the money is not a ‘back door bonus’ but confirmed she does not have any separate email address or working days for separate work done for Jersey-registered Kelda Holdings which has been given as the reason for the payment.

Details of two previously-undisclosed past £660,000 payments, made in 2023/24 and 2024/25, were first revealed by The Guardian last August.

It comes on top of an increase in her Yorkshire Water remuneration which rose from £689,000 to £732,000, including her base salary rising from £615,000 to £642,000.

Yorkshire Water said the increases were in line with increases for all employees.

She said: “I've had a pay rise at Yorkshire Water, but not at Kelda. I’ve had a pay rise in line with everybody else.”

While last year’s Yorkshire Water accounts had stated remuneration had been received from Kelda, it did not state the amount and Kelda’s Jersey location meant it had no duty to file public accounts.

Yorkshire Water initially refused to detail what amounts had been paid but after eventually confirming the figures, the company and its chief executive were subject to strong criticism by politicians - especially given the company was subject to a bonus ban due to its poor pollution record.

Earlier this year, Environment Secretary Steve Reed said customers were “outraged” and ordered an investigation. Ofwat subsequently ruled that 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.

When asked how she reflected on how the situation had been handled and the perception the payments would not have come to light without media reporting, Ms Shaw said: “I think we’ve learned that the public want to trust us, and they can only trust us if we’re transparent, and we need to keep informing them and being open, and hopefully over time that trust will come back.”

Yorkshire Water had argued that the Kelda payment was for work separate to Yorkshire Water involving “investor engagement, financial oversight and management”.

When asked by The Yorkshire Post how the separation of Kelda and Yorkshire Water works in practice and if she has a separate email address or different working days for the two entities, Ms Shaw confirmed that was not the case.

She said: “The reason they did it was because they think it’s important that customers don’t pay for stuff that is purely enabling the Kelda organisation rather than Yorkshire Water. In other organisations you can do it differently, but this was the way they chose to make it happen.

“I don’t suddenly take one hat off and put another one, I don’t have different emails.”

She said her work with Kelda related to resolving issues around £940m of intercompany loans between it and Yorkshire Water which had been subject to an Ofwat investigation and resulted in a repayment plan by March 2027 being agreed.

“What I was working on with Kelda was making sure that we got the investment in that we were committing to, through the work with the regulator on the intercompany loan, and then enabling our investors to put that money in to get them committed to it, and that’s a pretty important part of the job,” she said.

When asked why that work was not part of her existing job description at Yorkshire Water, she said: “I’m not saying I don’t get paid a lot of money. The good news is it’s not being paid for by customers.

“Shareholders are trying to make sure that there is a clear distinction between the work that customers pay for and the stuff that they do that is more helpful to them than it is directly for customers. Where that line comes is… different companies look at it in different ways and different customers will look at it in different ways, but that’s what the shareholders and the board decided felt the right balance in Kelda and Yorkshire Water.”

She denied accusations made by multiple politicians that the payments were an effective back-door bonus.

“That definitely is not the case,” she said.

“Ofwat looked at it, Ofwat said ‘A, it doesn’t breach the rules, and ‘B, it’s not performance related-pay’.”

Water industry chief executives are paid an average £1.1m a year and when asked about whether she feels her salary is justified, she said: “The job I do has benchmarks, just as the jobs that other people do have benchmarks. I think I have a particular set of experiences and priorities that make me well positioned for this job.

“I won’t be able to demonstrate that I have delivered on it straight away, because of the nature of a long-term investment programme in ancient assets that have got real asset health problems, but I can demonstrate, as I’ve told you already, there are things that we are doing that are laying the building blocks for future success for this business, and in a long-term business, that’s really important.”

In the summer, The Yorkshire Post revealed that Yorkshire Water was to be downgraded to a rare ‘one-star’ rating by the Environment Agency for its poor environmental performance.

CEO Nicola Shaw said there were several mitigating factors involved, including delays to work to protect Pudsey Beck which are now not due to be completed until 2028.

But she added: “Yorkshire Water’s performance is not good enough, and it's going to take us some time to turn that around. I think we will be a one-star company this year.”