Yorkshire Water’s chief executive Nicola Shaw is stepping down, a day after the Environment Agency gave the company its lowest possible environmental rating. Residents have faced rising bills and polluted rivers. Shaw received nearly £2m in payments from parent company Kelda Holdings between 2023 and 2026.
The agency recorded 260 pollution incidents caused by Yorkshire Water in 2025, its highest total since 2011. It awarded the firm one star out of four and classed it as a “poorly performing company”. Ofwat had already announced a £47m fine in 2024 for historic sewage leaks. The company’s pollution record subsequently deteriorated.
Shaw, who has led Yorkshire Water since 2022, will leave on 1 January. Nicola Medalova, a chartered environmental health officer who previously worked for National Grid and served on Yorkshire Water’s board, will replace her. Medalova joins on Monday for a transition period before taking charge in the new year.
Shaw received £1.3m across two instalments, followed by another £660,000 earlier this year. In December last year, she acknowledged that “not being transparent” about the earlier payments had been a “mistake”, while insisting the amounts were “not for me to decide”. Her admission concerned failing to disclose the payments, not accepting them.
Kelda said it paid her for “investor engagement” and “financial oversight”. Ofwat said the payments weren’t performance-related. Shaw didn’t have to deliver cleaner rivers to earn them. Kelda paid her for financial duties while the company she led failed to protect the waterways residents depend on.
The payments came to light when the government banned Yorkshire Water and five other water companies from paying “unfair” bonuses to bosses. But Ofwat’s distinction meant Shaw’s payments weren’t classified as performance bonuses. Ministers could restrict one form of executive reward without making the company’s environmental record the condition for every large payment to its boss.
Harrogate and Knaresborough MP Tom Gordon described what residents have faced:
“Her replacement needs to understand that residents are at their wits’ end, paying ever-rising bills for polluted rivers and threats of hosepipe bans while someone at the top rakes in millions.”
For working-class households, higher water bills eat into wages and benefits already needed for other essentials. Residents pay for sewage to be collected and treated, then live with the damage when the company fails to do that properly. A fine against the company doesn’t undo the pollution, and a new chief executive doesn’t erase the cost people have already borne.
Executives trying to maximise profits treat sewage treatment and maintenance as costs to contain. Residents need that work done properly, regardless of its profitability.
Naomi Tilley, campaigns manager at Surfers Against Sewage, put the problem beyond Shaw’s individual conduct:
“Regardless of who the CEO is, there’s sewage entering the sea and the water companies are failing. Yorkshire Water is not an outlier,” said Tilley.
“While these companies are set up for a profit, we’re never going to see pollution curbed and stopped.”
