Thames Water opts not to claw-back £2.5m of bonuses despite government disapproval
The company is beset by uncertainty, performing poorly and therefore a regular target of both political flak and public fury.
Who'd want to manage a company like Thames?
On one level, you can understand the logic of promising 21 senior managers at Thames bonuses totalling £15.7 million, just for hanging on in there until June 2026.
You can also understand why the payouts, which are not linked to performance, are being characterised as rewarding something that looks a lot like failure.
The Management Retention Plan (MRP) is targeted at a 'small number of individuals considered to be critical to both the Company's restructuring process and ongoing operational improvement,' explains Sir Adrian Montague, Thames' chairman.
His letter to the Environment Select Committee reveals that eight members of the firm's leadership team of 40 resigned in the year to March 2025, and that those who remain are 'regularly' approached with offers to jump ship.
In an attempt to hold onto 'the highest calibre of talent,' Thames Water paid nearly £2.5 million to its senior managers on April 21.
The managers, who are all paid salaries of between £100,000 and £500,000, are due to receive the same amount again in December and a further £10.8 million next June.
The company paused its MRP in May after the government expressed disapproval.
Montague says the board does not intend to recover the bonuses that have been paid to date.
He adds that the MRP 'was and remains paused' pending a decision by OFWAT on whether it should be allowed to continue.
Thames is financing the bonuses using money from an emergency loan of £3 billion which is intended to keep the firm afloat while its future is decided.
The loan carries an interest rate of 9.75% plus fees, and was advanced by the same group of investors who are collectively owed more than £11 billion by the business and who are now seeking to become its new owners.
OFWAT says it was not consulted about the bonuses and only became aware of them after they had been paid.
In his letter to MPs, the chief executive, David Black, said he was 'disappointed at the lack of transparency… at a time when remuneration in the water sector is under significant public scrutiny'.
The government had already moved to block the bonuses paid the executives at six water companies, including Thames, in 2024/25 but the rules only extend to chief executives, chief financial officer and chairs.
MPs have recalled Montague and Chris Westen, the CEO of Thames (who is not a member of the MRP), to answer questions on Tuesday July 15.
The next episode of the box set everyone hopes is coming to an end.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
3 hours ago
- Telegraph
Thames Water faces rocketing demand for supplies
Thames Water has warned that plans to build 100 new data centres across London and the South East will pile more pressure on its creaking infrastructure. The utility giant said it had identified 108 'hyper or large' data centres that will drive up demand in its region, with bosses suggesting it will have to manage water supplies carefully to ensure there is no impact on households. Each data centre is equivalent to thousands of homes being added to a water network, meaning the pipeline of new data centres is on par with a new small city being built. In its annual report, Thames Water said that building data centres 'needs to be carefully managed from a demand and UK growth perspective'. The company, which is battling to avoid nationalisation amid pressure from a £17bn debt pile, has previously raised the prospect of rationing water use for data centres or charging more at peak times. Data centres contain giant racks of computer servers that need to be cooled to avoid overheating, often with water piped in. The facilities are crucial to the rise of artificial intelligence and are a key priority for Sir Keir Starmer's growth push. However, the vast number being built has sparked concern among water companies such as Thames Water, which is now engaging with the Government to prevent potential shortages in future. 'The south-east of England is a water-stressed region and data centres can use a vast amount of water, equivalent to the usage of thousands of homes at peak draw,' a Thames Water spokesman said. 'With a large proportion of the proposed data centres earmarked to be built in the Thames Water region, it brings a challenge between safeguarding our finite resources while supporting the UK's growth strategy. 'It is important that we work collaboratively to meet this challenge and to avoid exacerbating water stress and impacting service for customers and the environment.' 'We are engaging with the Government regarding the challenge of water demand related to cooling data centres and how this can be mitigated. We are also working with a number of data centre providers about opportunities to reduce demand through innovation.' A corridor of land between London and Slough, much of which is served by Thames Water, contains Britain's densest collection of data centres. An independent review of the water sector last week cited data centres as one of the factors that are likely to mean water bills rising by 30pc over the next five years. The report, by Sir Jon Cunliffe, a former deputy governor of the Bank of England, said that national infrastructure bodies should be consulted when deciding where to build them. The Government has welcomed investment in new data centres, including designating them as critical national infrastructure. Thames Water last week started a hosepipe ban for more than 1 million people in Gloucestershire, Oxfordshire, Berkshire and Wiltshire. The company is also seeking to agree a rescue deal with creditors, but has warned it may fall into special administration if talks between the lenders and regulator Ofwat fail.
The Guardian
a day ago
- The Guardian
Water chiefs' pay rises to average of £1.1m despite ban on bonuses and outrage over pollution
The pay of water company chief executives in England and Wales rose by 5% in the last financial year to an average of £1.1m, despite a ban on bonuses for several companies and widespread outrage over the sector's poor performance. Total pay reported by water companies reached £15m in 2024-25, up 5% on £13.8m the previous year, according to Guardian analysis of 14 companies' annual reports. Water companies have been under scrutiny in recent years over their record on the environmentally damaging discharges of sewage into Britain's rivers and seas. Politicians and campaigners have also reacted angrily to bill increases allowed in April by the regulator, Ofwat. The pay figures raise questions about the effectiveness of the government's efforts to limit water executives' pay. Ofwat gained powers last year to insist that bonuses were paid by shareholders rather than through customers' bills, before new rules in June that allowed a ban on bonuses for bosses of companies guilty of the most serious environmental damage. The biggest pay increase was enjoyed by Keith Haslett, the chief executive of Affinity Water. He was awarded an extra £844,000, doubling his total pay to £1.6m. Portsmouth Water's boss, Bob Taylor, also doubled his pay, to £754,000. Six companies – Thames Water, Anglian Water, Southern Water, United Utilities, Wessex Water and Yorkshire Water – were banned from paying bonuses for the 2024-25 financial year to their chief executives and chief financial officers. The bonus ban did appear to have an effect, with pay falling 8% to £5.5m across those six suppliers. Most of that drop was driven by Thames Water, whose boss, Chris Weston, received £1m, after he and three predecessor chief executives received a total of £1.7m the year before. Despite the bonus ban, Southern Water awarded its chief executive, Lawrence Gosden, an 80% pay increase to £1.4m. After the Guardian revealed the increase, the environment secretary, Steve Reed, said Gosden should turn down the extra money. Southern Water said the pay increase complied with the rules. A spokesperson said it was not a bonus but part of a 'two-year long-term incentive plan'. Not all the money was paid during the financial year, and he may not receive all of it if Southern fails to achieve an adequate environmental rating. Sophie Conquest, lead campaigner at We Own It, a group campaigning for public ownership of water, said: 'The public is rightly angry about the obscene levels of cash being handed over to the private water bosses. 'What has their highly valued commercial brilliance delivered for us? Water bills hiked by 30% and the ongoing vandalisation of our rivers and lakes. No new reservoirs built in 30 years, and 3bn litres of water lost daily to crumbling pipes. 'Never in the field of essential public services has so much been earned by so few for doing so little.' Pay for chief financial officers pay fell 3% to £7.6m for the 12 water companies who disclosed it, although that decline was driven by a steep drop from £1.3m to £636,000 for the since-departed Alastair Cochran at Thames Water as the company neared collapse. Aside from Thames, CFO pay rose by 7% on average during the year. The highest-paid water boss was Liv Garfield, of Severn Trent, a FTSE 100 company that supplies 4.6m households across the Midlands and north Wales. She was granted £3.3m during the financial year. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The lowest-paid water chief executive was David Hinton, of South East Water, who received £456,000 – still well above the £270,000 salary for the head of the NHS. Luke Hildyard, the executive director of the High Pay Centre, which campaigns against 'excessive' pay, called for water company salaries to be limited to 10 times the lowest earners. 'Many people have found it hard to reconcile the litany of financial, environmental and customer service disasters variously afflicting these companies with top pay awards that have frequently exceeded £1m,' he said. 'Is a clean, reliable water supply really so contingent on these seven-figure pay awards?' A government spokesperson said: 'Undeserved bonuses for water company bosses have now been banned as part of the government's plan to clean up our rivers, lakes and seas for good. We also have ringfenced customers' bills to ensure investment must be spent on new sewage pipes and treatment works, not bonuses. 'Any instances of companies trying to circumvent the new rules are completely unacceptable. The government will leave no stone unturned against any bosses being made these payments.' A spokesperson for Water UK, a lobby group, said: 'Executive pay in the water industry is independently determined by remuneration committees, which abide by the laws and regulations set by government. 'Water companies are focused on investing a record £104bn over the next five years to secure our water supplies, end sewage entering our rivers and seas and support economic growth.'
The Sun
2 days ago
- The Sun
Thames Water are the latest corporate buffoons doing their utmost to bring my pub to its knees – it's time for revenge
YOU might imagine that staff at the near-bankrupt fish-killing enterprise known as Thames Water would be working round the clock. Ideally doing something about the hosepipe ban, rising bills and the torrent of sewage being pumped into the region's rivers every day. 6 6 Apparently not. A couple of weeks ago, two Thames Water inspectors arrived at my pub, with two people from the local council, and I assumed they were there to apologise for the woeful pressure, which is so low we have to harvest water overnight and store it in a 6,000-litre tank, because during the day all we get is a dribble. Nope. They were there to make sure I was complying with all their regulations. That seemed odd to me. I am one of their customers. I buy water from them so why should they be interested in what I'm doing with it. I sell beer to people, but I don't go round to their houses to make sure they're drinking it properly. Anyway, they were very thorough, even doing tests on the dog bowl taps we installed in the garden. And now I've received a massive eight-page list of changes they want us to make. It's stupid, petty stuff. Apart from one change they want making to our Rational steam ovens. Which, according to our plumber, would be impossible. Honestly, this is exactly the sort of corporate bullying that pubs really don't need right now. Menacing instruction Debt-ridden Thames Water hit with multi-million pound fine for polluting rivers as firm 'pushed to brink of collapse' One hostelry is closing every single day thanks to problems with mad Net Zero taxes, food allergy enthusiasts, staff shortages and the NI issues caused by Rachel Reeves 's idiotic Budget. And if they're now going to be hectored by water companies to change the flow rate of their taps, there won't be any pubs left at all. And it's not like we can just put the Thames Water missive in the bin because, naturally, it comes with a menacing instruction that everything must be sorted out within 21 days. Or else. Fine. Two can play at that game so here goes: Thames Water. You have 21 days to do the following. Or else. Upgrade the infrastructure so that you're able to supply your customers with a decent round-the-clock supply. Mend all the leaks in the region so the hosepipe ban can be lifted. Stop pumping faeces into our rivers. Undertake to cut bills to consumers by not paying your useless bosses massive bonuses. And know this. While you're getting on with that, we have started work on a bore hole. We're digging a 120ft-deep hole in the pub's garden so that we can pump our water from the massive underground lake down there. Unlike most of the water round these parts, there's no human s**t in it. You can drink it safely with no treatment at all. Also, we can pump it through our taps at whatever rate takes our fancy. And it'll cost us nothing at all. LATEST LECCY SHOCK THE Government recently announced a new scheme, which would give a £3,750 grant to anyone who bought an affordable electric car. They said it would only cost the taxpayer £650million and I'm afraid at that point I burst out laughing. Because I spent about ten seconds with a calculator and worked out that it would, in fact, cost billions. Turns out I was wrong. Because this idea was dreamed up by the Labourites, it doesn't really work. No one knows what cars are eligible for the discount and which ones aren't. Yes, it may have an electric motor, but unless it was built in a factory made from leaves and kale, it doesn't qualify. Salesmen in showrooms are saying the paperwork is ridiculous. It may well be then that no one can access the scheme, which means it'll actually cost the taxpayer nothing at all. ISLE SAY! SO the United Nations has decided that small countries should be allowed to sue bigger countries if they are causing too much global warming. Excellent. Because how hilarious would it be if one of those islands that only exist as an answer on Pointless sues Ed Miliband for not doing enough to save them. Can you imagine his silly little face. He'd be crestfallen. SEE THE LIGHT IN WALES I WATCHED a fascinating primetime BBC1 show this week called Guardian Of The Night. It was about the UK's taxpayer-funded 'dark sky officer' and her mission to turn off all the lights in huge chunks of Wales. Mostly this meant addressing a room full of parish councillor types and Liberal Democrats. Who were onside anyway. Her arguments were certainly amazing. She said that light pollution causes cancer and diabetes. Which is bad news if you live in, I dunno, a town or a city. But then she went on to explain that we need to be able to see the night sky so that we can spot an incoming asteroid. Er. I think if we are relying for our survival on a man called Geoff who uses a home-made observatory in Wales, we've probably had it. But don't worry, we aren't. So if you are reading this in Cardiff, don't worry. You can turn your lights on this evening. It'll make no difference. PHEW! IT'S JEZ 6 JEREMY CORBYN has announced that his new f ar-Left political party doesn't yet have a name. But he says suggestions are coming in from members of the public at the rate of 500 every minute. I bet they are. I bet they are. I must say, however, that I wish him every success. Because he will undoubtedly split the left's vote, thus ensuring that neither he nor that fool Starmer will win the next election. Maybe it should be called the 'Phew' party. HOW MY GREEDY LABS COULD COST ME DEER 6 6 TO try to train guide dogs not to tear off after every rabbit they see, boffins have strapped a toy squirrel to a radio-controlled car. Confused? I was too. But the idea seems sound. You take the trainee dog for a walk and have someone 'drive' the car back and forth so that, eventually, Rover gets used to it and won't yank the blind person's arm off as it sets off at 200mph in pursuit. I may try it with my dogs. They've learned not to chase the farm animals and will even sit quietly when our little army of guinea fowl clucks its way into the garden. But there is nothing I can do to stop them chasing deer. I spend half my life giving it the full 'Fenton' as they whizz about in a hopeless quest to catch something that's way faster than they are. So I shall buy a toy deer and strap it to a radio-controlled car. And see what happens. My only worry is that they're labradors. So if they catch it, they'd eat the toy. And the car as well.
