Ofwat consults on updates to performance related executive pay prohibition rule for water only companies
Ofwat has launched a consultation under section 35C of the Water Industry Act 1991 proposing updates to the performance related executive pay (PRP) prohibition rule for water only companies (WOCs). The proposed changes would require WOCs to prohibit PRP where they have experienced one or more category 1 incidents affecting water, as reported by the Environment Agency, in the calendar year preceding the end of the PRP payment year. This would align WOCs with the existing requirements for water and sewerage companies in relation to category 1 pollution incidents. The consultation closes on 27 February 2026, with the proposed changes intended to apply to PRP payments relating to the 2026–27 financial year. Ofwat has confirmed that no other changes to the PRP rule are proposed as part of this consultation, and that a comprehensive review of the entire PRP rule is scheduled to commence in 2027.