Undisclosed Payments to Yorkshire Water Boss Revealed
The chief executive of Yorkshire Water, one of Britain’s largest water suppliers, has received an additional £1.3 million in previously undisclosed payments since 2023. This significant remuneration was channeled through an offshore parent company, Kelda Holdings, registered in Jersey. Nicola Shaw, the CEO, received £660,000 from Kelda Holdings in both the 2023-24 and 2024-25 financial years. The size of these fees was notably absent from the annual report of Yorkshire Water Services, the regulated subsidiary.
This revelation has sparked considerable controversy, raising questions about transparency in executive compensation within the UK’s vital water industry. The initial refusal by the utility company to detail these payments, citing the parent company’s “private entity” status and “separate disclosure frameworks,” further intensified scrutiny. Only after persistent questioning did the company disclose the amounts, highlighting a significant loophole in current regulatory oversight.
Yorkshire Water’s Defense and Regulatory Compliance
In response to the Guardian’s inquiries, Yorkshire Water asserted that it fully complied with the regulator Ofwat’s requirements on pay disclosure and bonus payments. The company maintained that the extra payments to Nicola Shaw, which related to her work for Kelda Holdings, were covered by shareholders and not by bill payers. This distinction is crucial for water companies, which are under intense public scrutiny regarding how customer funds are utilized.
According to current regulations, regulated water companies are indeed required to report directors’ pay in their annual accounts. However, a significant gap exists: there is no obligation for parent companies, especially those registered in offshore secrecy locations like Jersey, to disclose their executive pay to the regulator or the public. Yorkshire Water’s defense, while legally compliant, underscores a transparency issue that allows substantial executive remuneration to remain hidden from public view, even for companies providing essential public services.
The Offshore Parent Company Loophole
The case of Yorkshire Water’s CEO highlights a critical loophole in the regulatory framework governing executive pay for utility companies in the UK. While the regulated operating companies must disclose directors’ pay, their offshore parent companies are often not subject to the same transparency obligations. Kelda Holdings, Yorkshire Water’s Jersey-registered parent, has no duty to file its accounts publicly due to Jersey’s relatively lax laws concerning corporate financial disclosures.
This lack of transparency means that the full remuneration packages of top executives can be obscured from public and parliamentary scrutiny. The Guardian revealed that Singapore’s government owns a third of Kelda Holdings, with other significant stakes held by the US investor Corsair Capital, Germany’s DWS, and the Australian pension fund SAS Trustee Corporation. This complex ownership structure, combined with offshore registration, creates a veil of secrecy around executive compensation, making it impossible for MPs and bill payers to ascertain whether total pay has increased, particularly after initiatives like the bonus ban were introduced.
Industry Scrutiny and Public Outrage
The revelation of these undisclosed payments comes at a time when UK water companies are already under intense scrutiny and facing widespread public outrage. Years of significant bill increases, coupled with widespread reports of sewage flowing into Britain’s rivers and seas, have fueled public anger. Politicians and campaigners have consistently expressed their dismay over the multi-million-pound pay packages awarded to top executives, especially when environmental performance is poor.
The Guardian previously revealed that average pay for chief executives across the industry still rose by 5% in the 2024-25 financial year. The government, in response to this public outcry, moved in June to ban bonuses for bosses of water companies found guilty of the worst environmental breaches. Yorkshire Water was among six companies affected by this ban, having agreed to a £40 million payment in March for excessive spills from storm overflows due to poor maintenance, and receiving another £850,000 fine in July for pumping chlorinated water into a stream in 2017. This latest pay controversy further exacerbates public distrust in a sector deemed essential.
Union and Political Reactions Demand Transparency
The news of the undisclosed payments has drawn sharp criticism from unions and political figures, who are demanding greater transparency and accountability. Gary Carter, the national officer for GMB, a union representing water workers, stated, “This is another case of water companies not listening to the outrage and concerns of the public over the payment of unjustifiable salaries.” He further emphasized that “The fact that this salary is hidden and not transparent just further undermines the reputation of water companies.
This sort of behaviour has got to end.” Rachael Maskell, the Labour MP for York Central, expressed similar outrage, commenting, “With pipes bursting and rivers contaminated, it is shocking to learn that Yorkshire Water’s boss has concealed her £1.3m award. When people across Yorkshire faithfully pay their water bills, they expect better.” Maskell argued that this behavior strengthens the case for water to return to public ownership and for top executives to be held accountable for every penny spent and every benefit taken. She expressed hope that Labour’s expected audit reform and corporate governance bill will ensure transparency across all utility companies.
The Financial Details Behind the Controversy
Yorkshire Water’s publicly published accounts had reported that Nicola Shaw’s pay from the regulated subsidiary had seemingly dropped by nearly a third in the 2024-25 financial year, from £1,028,000 the year before to £689,000. However, these accounts also contained a note stating that Shaw and the chief financial officer, Paul Inman, had received remuneration from Kelda Holdings, which “is therefore disclosed in the financial statements of that company.” As Kelda Holdings has no public filing duty in Jersey, the full picture remained obscured.
The Guardian’s investigation revealed that Shaw’s total pay from Kelda Group for the two years amounted to £1.7 million and £1.3 million, respectively. Inman also received £440,000 from Kelda Group in 2024-25, in addition to his £662,000 salary from Yorkshire Water. A spokesperson for Yorkshire Water justified these extra fees, stating they were for “investor-related activities, financial oversight and management of the Kelda Group,” and were paid by shareholders, not bill payers. They added that this work was “critical” and led to shareholders directly investing £500 million into Yorkshire Water, with a further commitment of £600 million.
Calls for Greater Transparency and Public Ownership
The controversy surrounding Yorkshire Water’s executive pay has intensified calls for greater transparency and accountability across the UK’s utility sector. The current regulatory framework, which allows offshore parent companies to conceal executive remuneration, is seen as a significant flaw that undermines public trust. Politicians and campaigners are now advocating for comprehensive audit reform and new corporate governance bills that would mandate full disclosure of all executive pay, regardless of the company’s registration jurisdiction. This would ensure that the total compensation of utility bosses is transparent and subject to public scrutiny.
Beyond transparency, the debate has also reignited calls for the public ownership of water companies. Critics argue that as essential public services, water utilities should prioritize public good over private profit, and that public ownership would ensure greater accountability and prevent such pay controversies. The ongoing public outrage over environmental performance and rising bills, combined with revelations of hidden executive pay, is fueling a broader movement towards systemic reform in the UK’s water industry.
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