Thames Water executives in line to split ‘astonishing' £13m bonus
The troubled utility company revealed in a letter to MPs that 21 of its highest-paid executives were slated to receive six-figure payouts between now and June 2026 under its controversial 'management retention plan'.
Payments were paused in May following outcry from MPs, but Thames said it had not yet decided on the future of the scheme, suggesting it could be resurrected.
The utility added that it had no plans to claw back any of the money already paid out, including £2.5m awarded in April.
MPs have called on both the Department of Environment, Food and Rural Affairs (Defra) and regulator Ofwat to reclaim the money amid concerns the utility giant was seeking to 'circumvent' a ban on bonuses in the sector.
However, in a letter to the head of the Environment, Food and Rural Affairs Committee, Thames Water chairman Sir Adrian Montague said there had been 'no discussions with either Defra or Ofwat in relation to recovering those payments which have already been made'.
Charlie Maynard, the Liberal Democrat MP for Witney, said: 'Despite their promises, this Government and the regulator are completely failing to get tough with water companies and deliver the wholesale reform the sector needs.'
The payments have sparked a backlash from campaigners and MPs, given that the water company is teetering on the brink of collapse as it struggles under a near-£20bn debt pile.
Nigel Farage, the Reform UK leader, told The Telegraph the fact that the company was even considering handing millions more to executives was 'astonishing given what a mess Thames Water is in'.
Steve Reed, the Environment Secretary, told MPs in May that customers were 'right to be furious about the rate of bonuses that chief execs were paying themselves for overseeing often catastrophic levels of failure'.
Sir Adrian said the company had paused its retention scheme 'to await final guidance from the water industry regulator on whether the payments would be allowed under the Water (Special Measures) Act 2025'.
The Water (Special Measures) Act 2025, which was introduced in February, gave Ofwat new powers to ban bonuses at water companies that failed to meet environmental standards. It is not clear if the rules also apply to the retention scheme.
Sir Adrian said: 'The guidance is still relatively new, and we will take the appropriate amount of time to consider the rule and engage further with Ofwat.'
'Lack of transparency'
David Black, Ofwat's chief executive, said in a separate letter to the environment committee that he was 'disappointed at the lack of transparency Thames Water had shown' regarding pay and bonuses.
He added: 'At a time when remuneration in the water sector is under significant public scrutiny, we expect water companies to be proactive and transparent and share any information that may relate to our regulatory requirements, such as executive remuneration.'
Mr Maynard said: 'The bosses of companies that are failing in these basic duties should be banned from receiving bonuses until they get their house in order.'
The environment committee said it was recalling Sir Adrian, Chris Weston, Thames's chief executive, and Ian Pearson, an independent director, on July 15 to answer more questions about the state of the company's finances.
Alistair Carmichael, the committee's chairman, said in a letter to Sir Adrian: 'It is unfortunate that recent evidence given to the committee has been inaccurate and has had to be clarified to such a degree that it has removed the possibility of our working together on the basis of trust.'
Thames Water, which serves 16m UK customers, is facing severe financial difficulties after it built up billions of pounds of debt under previous owner Macquarie, an Australian investment bank.
The crisis prompted Thames to secure a £3bn bailout package from lenders in February this year to stave off a potential bankruptcy.
It was later fined a record £122.7m by Ofwat in May for pumping sewage into lakes, rivers and waterways and breaching rules on payments of dividends.
The intervention contributed to KKR's decision to walk away from a £4bn takeover bid, which has left Thames Water on the brink of nationalisation.
Taking control of the utility giant through a special administration regime would cost the Government up to £4.1bn over an 18-month period, it has been estimated.
A Thames Water spokesman said the retention scheme was agreed by both the board and creditors.
The spokesman added: 'Retention plans are commonplace in these types of deals for precisely this purpose and ours was based on extensive benchmarking of similar capital market events like M&A deals and restructurings.'
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