Image description: Two people sat at a desk working out a problem on a piece of paper. There are two laptops, pens and paper on the work surface. Photo by Scott Graham on Unsplash.

Ofwat has written to the renumeration committee chairs of all Welsh and English water companies, reminding them of the new reporting requirements the water regulator has set out for any changes made to the renumeration packages offered to water company directors.

Securing public trust should be a priority for the water sector

This comes amid heightened stakeholder concerns over the year that water companies are trying to circumvent the rule, whether through increases in fixed pay or via other schemes such as a retention payment scheme.

In the letter, Ofwat’s Executive Director (Delivery), Helen Campbell, stresses that rebuilding public trust is a core priority for the water sector. The letter places renewed emphasis on transparency, calling on companies to provide clear and accessible disclosures on executive pay. The intervention aligns with updated remuneration and governance requirements introduced in April 2026, which place greater weight on customer and environmental performance.

Companies urged to follow the letter and spirit of the law 

Campbell emphasises that executive renumeration decisions should be fully explained, and rewards should be directly tied to measurable outcomes, including customer service, environmental compliance and operational performance. Where companies fall short, bonuses should be reduced or withheld altogether. Ofwat also expresses concerns about some companies attempts to work around existing rules on bonus payments, including routing payments through parent companies or adopting alternative remuneration structures. The regulator’s letter cautions firms against exploiting loopholes.

The letter instead calls on companies to provide clear and accessible disclosures on executive pay, and to maintain transparent dialogue with the regulator. Remuneration committee chairs are expected to recognise the importance of public trust when designing remuneration policies exercise robust, independent judgement, including challenging management where necessary to ensure pay decisions are justified.

You can read Ofwat’s letter in full here.