United Utilities: Banned bonus for FTSE 100 CEO revealed
The amount top bosses at FTSE 100 giant United Utilities are set to lose in bonuses – after the water giant was named as one of six to be banned from handing out the payouts – has been revealed.
Earlier this month, new measures in the Water (Special Measures) Act come into force which prohibited utility firms that oversee “poor environmental and customer outcomes” from offering bonuses to senior bosses.
As well as Warrington-headquartered United Utilities, Thames Water, Yorkshire Water, Anglian Water, Wessex Water and Southern Water have also been banned from paying bonuses.
If any of them pay bonuses while under the ban, the water regulator Ofwat has the power to step in and take the back.
More than £112m in bonuses and incentives have been awarded by UK water firms over the last decade. Some £7.6m was awarded last year alone.
Now, how much United Utilities had planned to pay its two executive directors in bonuses for its latest financial year has been revealed.
Chief executive Louise Beardmore had been awarded an annual bonus of £417,000 for the year after having received a £420,000 award for the prior 12 months.
The Chief financial officer was also in line to receive an annual bonus of £269,00, up from £266,000.
Profit jumps at United Utilities
United Utilities’ annual report was written before the new measures in the Water (Special Measures) Act come into force on Friday, June 6.
The business said that no bonuses would be paid to its executive directors “until the [remuneration] committee has all necessary information for it to be certain that the standards set out in Ofwat’s rules have been met”.
In a statement issued to City PM, the company said: “We have a long track record of ensuring performance related pay for executives is closely linked to the outcomes that matter most to our customers. In addition, our performance related pay is funded by shareholders, not by customers.
“We are complying fully with the new remuneration rules and we are focused on our £13bn investment programme – our biggest ever – which will improve services for customers and the environment, support 30,000 jobs and deliver an estimated £35bn of economic value to the North West.”
In May, City PM reported that profit at United Utilities jumped significantly ahead of the FTSE 100 giant hiking water bills for its more than seven million customers.
The company, which serves customers in the North West of England, also proposed an increase to its final dividend of 4.2 per cent to 34.6p.
The firm reported a pre-tax profit of £355m for the 12 months to 31 March, 2025, up from the £170m it posted for the prior 12 months. Underlying operating profit rose 22.4 per cent to £634m.
Figures filed with the London Stock Exchange also showed its revenue increased by 10 per cent to £2.1bn.
Bills are set to rise by an average of 32 per cent over the next five years as the company attempts to fix leaky infrastructure. That will mean an average increase of £31 per year until 2030.
‘Understandable’ focus on exec pay
In its annual report, United Utilities remuneration chair Kath Cates said: “The past year saw the conclusion of what has been a challenging but successful five-year regulatory period, in which the company has delivered strongly for stakeholders, including customers and the environment.
“Meeting or exceeding around 80 per cent of our performance commitments has positioned the company as a top-quartile performer, and on a great footing to make further progress during the next regulatory period.
“The water sector has remained subject to significant scrutiny during the year, with continued interest from customers and wider society on pollution and spills from storm overflows in particular.
“It is understandable why executive pay, and performance-related pay in particular, has formed part of the discourse.
“As I said last year, everyone, including those working in the water sector wants to see environmental performance improve and we recognise that this is key to restoring public confidence and trust.”