By Abdullahi Lukman
Ofwat, the regulatory body overseeing the UK water industry, has launched a formal investigation into undisclosed payments made to senior executives at several water companies.
This follows recent revelations that Nicola Shaw, the chief executive of Yorkshire Water, received more than £1 million in fees from the company’s offshore parent, Kelda Holdings, which were not previously disclosed.
According to reports, Shaw was paid £660,000 annually by the Jersey-registered Kelda in each of the last two financial years, raising questions about transparency and compliance with remuneration regulations within the sector.
The Guardian initially broke the story, prompting closer scrutiny from Ofwat.
Earlier this month, Ofwat sent letters to a number of water companies, including some of the largest operators in the industry, requesting detailed information about their executive pay arrangements.
Industry insiders have confirmed that these requests aim to examine whether companies are adhering to rules prohibiting certain types of performance-related pay.
A spokesperson for Ofwat emphasized that the regulator’s probe was already underway before Shaw’s remuneration was publicly reported.
The investigation forms part of a broader review to ensure companies comply with regulations designed to prevent excessive or undisclosed payments to executives.
Ofwat’s spokesperson added, “Where we find evidence that a company has breached the rule, we have powers to direct companies to take remedial actions which, if not complied with, can result in enforcement actions, including financial penalties.”
This investigation comes amid ongoing concerns about governance and financial transparency in the water sector, as the government plans to abolish Ofwat in the coming years and potentially restructure industry regulation.
The probe signals the regulator’s commitment to enforcing accountability before it exits its oversight role.
The water industry and its regulators face increasing pressure to ensure fair management of funds, especially given public scrutiny over water bills and company profits.
Ofwat findings could lead to significant repercussions for companies found to have violated pay disclosure rules, potentially reshaping executive compensation practices across the sector.
