Yorkshire Water CEO receives £1.3m undisclosed payments on top of salary and bonus from off-shore parent firm

Nicola Shaw received payments of £660,000 in the 2023-24 and 2024-25 financial year from Kelda Holdings, Yorkshire Water’s Jersey-registered parent company, on top of her main salary and bonus payments.

These were not published in Yorkshire Water’s annual report and executive pay does not have to be declared in Jersey. They were only revealed after an investigation from The Guardian newspaper.

This means in 2023-24, Ms Shaw’s overall remuneration package was almost £1.7m, as the additional payment was on top of a base salary of £585,000, more than three times that of the Prime Minister, along with a bonus of £371,000 and additional benefits of £72,000.

In 2024-25, the CEO decided not to take a bonus so her overall pay was £689,000, with the Kelda Holdings payment pushing this up to £1.35m.

A Yorkshire Water spokesperson said that as part of her role Ms Shaw “also does some work for the benefit of Yorkshire Water’s parent company, Kelda Group, including investor engagement, financial oversight, and management of the Kelda Group, which is recognised by a fee of £660,000 paid by shareholders.

“This is a conscious governance decision: we do not believe that work done on investor-related activities should be paid for by Yorkshire Water customers’ bills.”

Kelda Group is a subsidiary of Kelda Holdings, which is part owned by the Singapore Government, US investor Corsair Capital, German firm DWS and Australian pension fund SAS Trustee Corporation.

Yorkshire Water currently has a debt to equity ratio of 70 per cent with its holding company, which water regulator Ofwat describes as unstable.

Dividend payments are effectively paid as debt interest to the shareholders.

In the last seven years, the company’s debt has risen from £4.2bn to £6.8bn, requiring £275m to be spent each year servicing the interest.

Sewage spills have contributed to a situation in which no single river in Yorkshire is considered to be in good overall health, while Ilkley Beach is the most polluted waterway in the country.

The Environment Agency has given Yorkshire Water a “red rating” for pollution, and recent figures showed it had the third most serious pollution incidents of any water company in the country.

In March, Yorkshire Water agreed to pay regulator Ofwat a £40m fine, and now, as a result, Ms Shaw and chief financial officer Paul Inman will be banned from taking a bonus for the 2024-2025 financial year.

Government figures show that over the last decade Yorkshire Water’s CEO and CFO have taken almost £13m in bonuses, more even than those at under-fire Thames Water.

Ofwat is now assessing whether this additional payment from Kelda Holdings has broken the Government’s bonus ban rules.

A Defra (Environment Department) spokesperson said: “We are aware of these payments, which Ofwat are currently assessing as a matter of urgency.

“Undeserved bonuses for water company bosses have now been banned as part of the government’s plan to clean up our rivers, lakes and seas for good.

“Any instances of companies trying to circumvent the new rules are completely unacceptable.

“The Government will leave no stone unturned in clawing back any payments if found to be against the rules.”

Yorkshire Water customers have been left furious as only a few months after hiking bills by 29 per cent, the company brought in a hosepipe ban following record-breaking dry weather.

Lib Dem MP for Harrogate and Knaresborough, Tom Gordon, said: “It's a disgrace that Yorkshire Water's boss has been awarded such an eye-watering sum and an even bigger disgrace that they were dragged kicking and screaming to disclose it.

“Billpayers across Yorkshire don't want miracles, they just want a water company that can deliver the basics and provide them with a decent service. This is a kick in the teeth to them.”