All the water companies in financial trouble - and the ones still paying out bonuses

A host of water companies have been barred from using customer funds to pay executive bonuses this year. Ofwat, the water services regulation authority, has blocked about three-quarters of the total bonuses proposed by firms from being funded by consumer payments, while also revealing which companies are high on its financial watchlist.

As authorities attempt to rein in the privatised water industry, the PA news agency provides a breakdown of what's happening at each firm across the country. .

Thames Water

Thames Water paid out £770,000 in bonuses to its chief executive and chief financial officer, but Ofwat prevented it from using customer money to fund them. The beleaguered London water provider is saddled with £16 billion of debt and recently issued a warning that it would require rescue funding to stay afloat beyond next year.

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Thames is currently finalising that deal – in the form of additional loans, worth a further £3 billion – to keep it operational until 2026. Ofwat placed Thames in its most serious "action required" category of financial monitoring and singled it out for criticism, stating it "urgently needs to address its financial position".

Despite this, it distributed £195.8 million in dividends to shareholders last year, a practice Ofwat said it will stop from Thames this time around.

Southern Water and South East Water

Southern Water’s top executives received £312,000 in bonuses, which were paid by shareholders, not customers. Ofwat stated that the company did not provide a reason that the award "at all was justified".

Regulators have categorised Southern Water within the "action required" category – one of only three firms, alongside Thames and South East Water, to be marked as such. Southern Water is buckling under a hefty £6 billion debt pile that was recently relegated to "junk" status by Moody's.

Similarly dire, South East Water lands in the sector's most severe financial oversight grouping due to "ongoing financial pressures" from soaring expenditure and pricier loan repayments, triggering "concerns" regarding its financial resilience, according to Ofwat. Despite these challenges, the company's top brass took home bonuses totalling £187,000 last year, partially funded by customers' bills.

And while neither Southern nor South West shelled out shareholder dividends last year, Ofwat has made it clear they'll require explicit consent from the watchdog to do so in the upcoming period.

Yorkshire Water

Yorkshire Water was barred from dipping into customer finances to cover £616,000 worth of executive bonuses, linking the decision to "financial resilience risks," exacerbated by fines imposed this year for the firm's poor environmental track record.

Wessex Water

Wessex Water’s financial health has been flagged for "deterioration” over the previous year by Ofwat, although this didn't hinder leadership from receiving £387,000 in bonuses and incentives, which were, however, not defrayed by bill-paying customers.

SES Water

SES Water bosses pocketed £386,000 in bonuses, partially funded by customers, sparking concern from the industry regulator. Ofwat has stated it will "closely monitor" SES Water’s finances following its acquisition by listed utilities giant Pennon earlier this year.

Northumbrian Water

Northumbrian Water, along with Affinity Water and Portsmouth Water, also remain under scrutiny by Ofwat for another year due to financial worries.

Executives at these companies received substantial bonuses: Affinity bosses took home £395,000, Northumbrian executives earned £315,000, and Portsmouth chiefs were paid £100,000, with customer money contributing to some of the payouts.

The rest

The rest of the water companies escaped Ofwat's financial watchlist, with many still awarding hefty bonuses to their top brass. Dwr Cymru Welsh Water had intended to use customer money to fund £163,000 worth of executive bonuses, but the regulator intervened.

Severn Trent Water and United Utilities rewarded their bosses with £2.6 million and £1.4 million respectively in bonuses and long-term incentive plan (LTIP) payments, neither using customer funds. South West Water executives received £470,000 in incentives, while Anglian Water granted its finance chief a £95,000 bonus—both companies financing these bonuses through shareholder money.

Moreover, South Staffs Water provided its CEO with a £49,000 bonus.