First reported in The Times, the looming boardroom conflict has stemmed from the company’s proposed executive pay policy.
The pay policy, which will need to be approved at UU’s Annual General Meeting on July 17, includes a £435,000 allowance for CEO Louise Beardmore and a £280,000 allowance for Phil Aspin, chief financial officer.
Allowances will be paid in shares, each year until 2030.
Ms Beardmore made over £2.5 million in the 2025/26 financial year, including her £971,000 base salary, £830,000 annual bonus and £712,000 long-term incentives.
If approved by shareholders, the allowance would see Ms Beardmore make £2,948,000 at the close of the next financial year, assuming no further increases in salary.
UU is reportedly using the allowances to make up for the absence of a performance bonus, which Ms Beardmore was denied by water regulator Ofwat in the 2024/25 financial year.
Ministers gave additional powers of enforcement to Ofwat last year, enabling the regulator to stop bonuses being paid to water bosses if their company was responsible for pollution.
Ms Beardmore and Mr Aspin were denied their bonus over an incident at a reservoir which led to the death of a thousand fish.
Institutional Shareholder Services has advised clients with stock in United Utilities not to support the allowances for the CEO and CFO.
The shareholder advisory group has raised concerns to its clients about the guaranteed increases in yearly earnings, warning that the allowances “have the effect of insulating pay from performance.”
UU’s Integrated Annual Report 2026 reveals that the latest version of the directors’ renumeration policy was approved with 99 per cent support at the 2025 AGM.
But UU’s report states that “the timing was not ideal” due to a now ongoing, industrywide price review by Ofwat.
The report said: “While the committee did undertake a review of the policy, the limited time available and uncertainty affecting the sector led us to conclude that the most appropriate course of action was to effectively roll over the existing policy, with only a minor change to bonus deferral being proposed (to reflect emerging market practice).”
UU therefore considers it necessary to review the policy again, bringing the changes, allowances included, to the AGM this July.
A spokesperson for UU told Newsquest Cumbria that it is “competing to retain and attract talent in an extremely challenging and competitive marketplace, with other industries seeking the same key skills we need, but without the increasingly complex regulatory and political landscape we are operating within.
“To that end,” they said, “it is vitally important that we have an effective remuneration policy in place that reflects the size and associated risks of AMP8 and enables us to motivate and retain our talented and experienced leadership team to deliver the challenging plan.”
AMP8 refers to Asset Management Period, a five year cycle which which sees widespread change to infrastructure, environmental protections and investment in the water sector.