Anglian Water hands chief £1.3mn in retention pay despite bonus curbs
Nearly two-thirds of £1.9mn pay package paid by parent company unregulated by Ofwat
Anglian Water has handed its chief executive £1.3mn in retention and other payments in a move that appears to sidestep the regulator’s powers to clamp down on bonuses.
Mark Thurston received £593,000 in base pay and benefits including pensions in the year to April 2026. But he was also given £1.27mn including a £500,000 retention payment by Anglian’s parent company taking total pay to £1.86mn, according to its annual report.
The government introduced new rules last year that clamp down on excessive pay for poor performance. But Anglian Water said in the report that its parent company was not regulated by Ofwat and that the additional payments were in keeping with the rules.
Anglian Water, which introduced the new pay and incentive arrangements late last year, said: “The regulated business — AWS — has not paid bonuses, in line with regulation.”
“The MTAP (medium term alignment plan) and retention awards are not linked to AWS performance conditions and are permitted under the regulations.”
Ofwat said: “We are currently reviewing companies’ remuneration decisions and will not hesitate to take action where we find breaches of our rules.”
Thurston, the former chief executive of the troubled HS2 high-speed railway line, is eligible to receive a maximum of £2.5mn next year depending on performance.
This includes a further £300,000 retention bonus to be paid this month as well as an additional £451,440 in cash from a “medium term alignment plan” that is not subject to performance conditions.
Anglian Water, which serves 7mn customers across the east of England, has admitted that it will miss regulatory and environmental goals including on leakage and sewage pollution. Last week Anglian Water imposed a hosepipe ban.
The pay award could add to the public outcry against high pay at water companies, which face no competition and receive nearly all their income from customer bills, which are set by the regulator.
United Utilities’ chief Louise Beardmore received an £830,000 annual bonus, and was paid £2.5mn in total including long-term incentive awards, in the last financial year. The FTSE 100-listed utility has proposed a £435,000 allowance for this year, which is paid in shares that must be held for two years and is not subject to performance conditions.
ISS, the shareholder advisory group, has told its members to vote against the proposal at its annual general meeting on Friday.
Severn Trent has also doubled the size of a performance-related, long-term reward scheme for its new chief executive James Jesic to as much as £3.1mn.
Anglian Water customers are facing a 44 per cent rise in average household bills after forecast inflation between 2024/25 and 2029/30 to around £757 a year, according to the Consumer Council for Water.
Mike Keil, chief executive of the Consumer Council for Water, said: “Customers would be incensed if any water company was found to be circumventing bonus payment rules and we would expect the regulator to step in if evidence was found of this.”
Anglian Water is owned by investors including the Luxembourg-based Infinity Investments, the Canada Pension Plan Investment Board and Australia’s Igneo Infrastructure Partners and IFM Global Infrastructure Fund.
United Utilities said: “We are committed to paying competitive, market-based remuneration to all our employees.” Severn Trent was not immediately available for comment.
Anglian Water said in a statement to the FT: “Our shareholders decided to fund targeted, time-limited retention arrangements to maintain leadership continuity.” It added: “These arrangements do not replace bonuses and are not paid for by Anglian Water Services or customers.”