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by Karma Loveday

Ofwat sets out plans to claw back undeserved executive bonuses

Ofwat has published for comment by1 May, proposed guidance on how it will go about clawing back executive bonuses it believes customers should not fund.


Ofwat intends to adjust revenue allowances as part of the end of period reconciliation process so customers do not fund bonuses where companies cannot clearly demonstrate their decisions reflect regulatory expectations.


These expectations are set out in the guidance. In summary, Ofwat requires remuneration committees to take full account of performance for customers and the environment, and performance overall, when deciding whether to award bonuses.


This mechanism will apply both to the remainder of the 2020-25 period and for the 2025-30 period.

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