Bosses of Britain’s water companies could have bumper bonuses taken away if they fail to perform as they should
BOSSES of Britain’s water companies could have bumper bonuses taken away if they fail to perform as they should.
Watchdog Ofwat said customers should not have to fund executives’ pay if they fail to deliver on customer service and environmental responsibilities.
It is cracking down on pay and bonus packages for water chiefs after they soared by a fifth in 2021-22.
That was despite the widely-reported significant sewage spills ruining the nation’s waterways.
David Black, chief executive at Ofwat, said: “Customer trust is damaged when executive bonuses are not aligned to water company performance for customers and the environment.
“We said that if companies didn’t address this then we would take action, and that is what we are doing.”
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Water firms will have to take into account poor records on customer service and waterways’ pollution when deciding on whether to award bonuses to execs.
They will also have to consider the overall financial health of the business, and compliance issues.
The average pay for bosses at ten water firms across England and Wales soared to £1.1million in 2021-22 — up by £193,000 on average.
This was despite the Environment Agency reporting more than 370,000 sewage spills from storm overflows in England in 2021.
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Earlier this month, Ofwat announced new powers to stop suppliers paying out shareholder dividends if they fail to meet performance standards.
The proposals are open for consultation until May.
Emma Clancy, chief executive of the Consumer Council for Water, said customers deserve to know why bonuses are awarded.
She added: “We want chief execs to explain to customers — who are not able to switch supplier — why their salaries are justified.”
HOTEL IN COUNCIL LINKS BID
BUDGET chain Travelodge wants local councils to help it open 300 new hotels.
Bosses have written to 220 authorities across the country in the hope of entering into partnerships with them to jointly develop hotel schemes.
They say expansion plans for towns such as Ripon, Lichfield and Cromer would help regenerate local economies as well as create more than 9,000 jobs.
Travelodge property chief Steve Bennett said: “A Travelodge hotel can help attract new business, support regeneration, bring vacant buildings back into economic use as well as revitalise high streets.”
Last year, it opened six new hotels — three in partnership with local authorities who can either keep ownership of the hotels and be paid rent, or sell it to Travelodge.
Mr Bennett added: “We have a track record of working with 25 forward-thinking local authorities across the UK, from Ashford to Stirling.”
SHARES
BARCLAYS up 2.80 at 144.82p
BP up 2.70 at 513.20p
CENTRICA up 2.35 at 106.35p
HSBC up 1.30 at 555.30p
LLOYDS up 0.65 at 47.77p
M&S up 6.30 at 166.00p
NATWEST up 3.10 at 265.40p
ROYAL MAIL down 1.80 at 223.90p
SAINSBURY’S up 7.90 at 275.70p
SHELL up 20.00 at 2,318.00p
TESCO up 2.40 at 264.90p
INSURER’S BIG LOSS
STRUGGLING life insurer LV saw losses surge last year from £66million to £265million — blaming “high inflation, rising interest rates and low growth”.
Sales of pensions and investment funds have been hit by “difficult market conditions”.
But sales of annuities rose over 90 per cent, equity release jumped by a fifth and protection products increased by a tenth.
David Hynam, who took over as boss from Mark Hartigan in September, said: “The outlook for LV remains positive.”
It’s cold comfort
THE recent extended spell of cold weather has hit Swedish fashion chain H&M as demand for spring ranges has been delayed.
But the success of its online second-hand platform Sellpy has helped the business to an unexpected quarterly profit.
That news helped shares to jump by 16 per cent today in a ten-month high for the company.
The group — the world’s second largest fashion retailer — has been hit by higher shipping prices, the cost of leaving Russia and a £16million leap in its energy bill.
But profits climbed to £56.3million in the three months to the end of February — up from £35.6million only a year earlier.
The company was boosted by adding Sellpy’s £77.7million profits into the group’s figures.
Helena Helmersson, H&M boss, said: “The spring collections have been well received in the markets where spring has arrived.”
SMALLER SHOP LIFT AT CHAIN
SUPERMARKET giant Morrisons said revenues climbed 3.4 per cent to £4.7billion in the last three months as it opened its 500th convenience store.
The Bradford-based chain has struggled to cope with the sales growth of rival discounters Aldi and Lidl recently.
Its share of the grocery market has fallen from 9.5 per cent to 8.8 per cent in the last year, according to analysts Kantar.
Morrisons chief David Potts said: “We still have plenty of work to do, but momentum in the business is now building.”
The firm opened its 500th Morrisons Daily convenience stores this week in Salford.
It bought convenience business McColl’s in May 2022 and 350 of its stores now trade as Morrisons Daily, with ten converted every week.
Mr Potts added: “We expect to reach 750 Morrisons Daily stores in the autumn.”
The business has targeted £700million cost savings in the next three years.
THEY SAID WHAT?
Business confidence has seen a surge this month with economic optimism and trading prospects bolstering firms.
— Hann-Ju Ho, Lloyd’s Bank economist
RETAILER HAPPY AS A PIG IN…
THIS month’s Mothers’ Day gave a timely boost to gift cards company Moonpig.
It achieved record sales, despite taking a big hit from the Royal Mail postal strikes and falling demand from consumers in the cost of living crisis.
The company’s shares have slumped around 40 per cent since late last year, when it said it would focus on cards rather than small gifts like flowers and chocolates.
Despite that, Moonpig has predicted sales of about £320million for the year up to the end of April.
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Boss Nickyl Raithatha said the positive update was “a testament to the resilience of our business model, as demonstrated by a record UK Mother’s Day.”
The news sent shares racing up 11 per cent.