Water companies have found creative ways to circumvent the bonus rules imposed by the government, raising questions about the effectiveness of the regulations. The author argues that the government's approach was naive and predictable, as it failed to account for the potential alternative methods of compensation. The Water (Special Measures) Act of 2025, while aiming to ban performance-related bonuses for polluting water bosses, had a significant flaw: it did not formally address other forms of payment. As a result, salary increases, allowance awards, and retention payments have proliferated, leading to an overall increase in reported pay packets for chief executives and chief financial officers. The author highlights the case of Thames Water, where the chief financial officer received a delayed signing fee and retention payments for other executives were 'paused' but not eliminated. The government's response is described as 'shocked' but the author questions the sincerity of this reaction. The article concludes by suggesting that the regulator's review of the rules may not yield significant changes, and calls for a more proactive approach to holding water companies accountable for their compensation practices.
