This document sets out our proposed guidance relating to the scope and application of the performance related executive pay (PRP) recovery mechanism we intend to apply, as outlined in our PR24 final methodology. Under this mechanism, we will be able to adjust revenue allowances, so that customers do not fund PRP awards if a company is unable to demonstrate that their decisions reflect our expectations.
This policy will apply both to the remainder of the 2020-25 period (2022-25) with adjustments made at PR24 and the 2025-30 period.
The technical details of the operation of the mechanism will be set out in our PR19 Reconciliation Rulebook for the current (2022-25) period, and in the PR24 Reconciliation Rulebook for 2025-2030.
If you wish to comment on this guidance, please email the Ofwat governance team at [email protected]
The closing date for comments is 1 May 2023. If you wish to discuss any aspect of this consultation, please contact [email protected]