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.
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