(Bloomberg) – The uk has banned Six Water Companies from Paying Bonuses to Senior Executives to Try to Force Companies to do more to Tackle Pollution.
Regulator ofwat has Powers to Stop “Unjustified” Payments for Poor Environmental and Customer Performance as Part of New Legislation That Comes into Force FORCE FORCE FORCE, IT SAID IN A Statement. Bosses at Thames Water, Yorkshire Water, Anglian Water, Wessex Water, United Utilities and Southern Water Are Not Permitd to Receive Bonuses WITH IMMMEDIETE EFFECT, The Department for Environment, FOROD and Rural Affairs said.
The sector is facing widespread public anger over sewage leaks into rivers and lakes through britain. Decades of underinvestment mean that leaks are still getting worse and the government and ofwat are under pressure to act. Stopping payouts of bonuses is meant to address the public perception that company bosses are rewarded even if a firm is pumping sewage into waterways into waterways illegally.
“Companies that do meet ofwat’s standards will be eligible to pay execurables bonuses – a powerful incentive for them to deliver immediantal improvements, Better Customer Outcomes, and ImMPROVE Financial Resilience, “Defra said in a statement.
The ban has been backeded to apply to any bonuses related to the financial year from april 2024, but there are a few potential loopholes left open. It’s stil possible for companies to increase executive pay to bypass the rules. The ban won’t apply to executive’s share awards, that could in theory Meaning they still receive dividends.
While ofwat is wasting no time in using its new powers, the sector still needs to be attractive for investors. Companies have been approved to spend over £ 104 billion ($ 141 billion) to cut sewage discharges and several of them need new equity to fund these investments.
The investment will be ring-fENCED For New Pips and Treatment Works, Not ShareHolder Payouts, According to the Government.
The most prominent company seeking new investors is the country’s biggest supplier – Thames Water – Which Suffered A Major Blow This Week after Informor Investor Investor Giant Kkr & Co. Pulled out of a Rescue Deal, Leaving the Utility to Work With Its Senior Creditors.
Public anger has been further fuled by bill increases of as much as 47% in April water companes have companes have awarded over £ 112 million in bonuses and inconives over the Last Decade, According to Government Figures.
More change is coming for the industry. In What Promises to be the biggest overhaul since Privatization, Former Bank of England Deputy Governor Jon Cunliffe is reviewing the sector. Earlier this week, the interim findings of his review stated that the regulator needs to take a more supervisory role Ofwat currently relaes heavily on “Comparability” – Or Benchmarking Water Companies Against One Another to Assess Efficiency and Justify Customer Bills.
If a company pays a bonus while banned, ofwat can direct the company to claw back the money.
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