The sector regulator has banned nine water companies from using their customers’ money to fund “undeserved” bonuses.
Ofwat said it had stepped in to use its new powers on water companies that cannot demonstrate that bonuses are sufficiently linked to performance.
Blocked payments amount to 73% of the total executive rewards offered across the industry.
The regulator prevented Thames Water, hit by the crisisYorkshire Water and Dwr Cymru Welsh Water to pay £1.5 million in bonuses from cash generated by customer invoices.
It said six other firms have voluntarily decided not to pass on the cost of executive bonuses, worth a total of £5.2 million, to customers.
Instead, Anglian Water shareholders, Severn TrentSouth-West, South Water, United Utilities and Wessex will pay the price.
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David Black, chief executive of Ofwat, said: “By stopping customers paying for undeserved bonuses that do not properly reflect performance, we seek to sharpen the mindset of leaders and push businesses to improve. their performance and their culture of responsibility.
“While we are starting to see businesses take positive steps, they need to do more to restore public trust. »
The announcement came as part of an Ofwat update on financial resilience and business bonuses.
Industry lobby group Water UK said: “Almost all water company bonuses are already paid for by shareholders, not customers.
“All businesses recognize the need to do more to deliver on their plans to support economic growth, build more homes, secure our water supply and end sewage flowing into our rivers.
“We now need regulator Ofwat to fully approve the water companies’ £108 billion investment plans so we can continue.
“Ofwat’s financial resilience report provides further evidence that the current system is not working, with returns below 2% and eight businesses making losses.
“It is clear that we need a faster, simpler system that allows businesses to meet the expectations of their customers, the environment and the country. »