Exclusive:Yorkshire Water to end controversial off-shore payments with new CEO

After four-and-a-half years at the helm of the embattled water company, Ms Shaw abruptly announced that she was standing down this morning less than 24 hours after the firm received a one-star pollution rating from the Environment Agency, the lowest possible score.

She said: “This now feels like the right time to begin an orderly transition to the company’s next chapter.”

Earlier in the year, Yorkshire Water was taken over by a Swedish private equity firm as well as an Australian and Singapore-owned wealth fund.

Ms Shaw is set to be replaced by current National Grid chief of staff Nicola Medalova, who will start on Monday as CEO designate.

On Ms Shaw’s watch, there was a 70 per cent rise in pollution incidents in 2025, the highest level since 2011. All this came amid a substantial hike in customer bills.

Thursday also saw the Environment Department (Defra) once again put in place a bonus ban on Yorkshire Water, with Dame Angela Eagle promising to strengthen this going forward.

Politicians from across the region had long been calling for Ms Shaw to resign, based on the controversy around secret off-shore payments.

Over the last three financial years, Ms 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.

At the time, then environment secretary Steve Reed said customers were “outraged” and ordered an investigation.

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.

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.

However, The Yorkshire Post can now reveal that Ms Medalova will no longer receive these additional payments.

Yorkshire Water would not confirm details of the incoming CEO’s base salary, saying these details would be published in the company’s report.

Ms Shaw’s exit has been welcomed by MPs and mayors, with long-standing critic Tom Gordon, the Harrogate and Knaresborough MP, saying “good riddance”.

He continued: “Nicola Shaw oversaw abysmal management of our precious natural resources, trashing our rivers while receiving an eyewatering salary.

“She should have stepped down much earlier instead of hanging on to receive the lowest possible Environment Agency rating.

“Her replacement needs to understand that residents are at their wits end, paying ever-rising bills for polluted rivers and threats of hosepipe bans while someone at the top rakes in millions.”

Labour’s York and North Yorkshire Mayor David Skaith said Ms Shaw quitting came “not a moment too soon”.

“It’s a disgrace that, as water bills continue to rise for customers across Yorkshire, performance has gone in the opposite direction.

“That’s why I agree with the Prime Minister that we need greater public control of our water system, so that delivering improvements takes priority over lining the pockets of bosses and shareholders.”

Keighley and Ilkley MP Robbie Moore added: “I receive countless complaints about Yorkshire Water's terrible communication with its customers, its mismanagement of roadworks, shoddy workmanship and this, coupled with their ongoing sewage pollution incidents and continuous water leaks going unfixed for months, change at top has been long needed.

"I have therefore already requested an urgent meeting with the new CEO Designate Nicola Medalova to understand how she plans to improve Yorkshire Water's performance at speed. The status quo cannot continue.”