The Environment, Food and Rural Affairs Committee has published a response from Sir Adrian Montague, Chair of Thames Water, which discloses that bonus payments to 21 Thames Water executives have already been paid, despite the new rules.
In his letter to EFRA Chair, Alistair Carmichael, Sir Adrian said:
“The recipients of the retention payments are a number of senior members of the management team: 21 in total who we believe are integral to this crucial next phase of the business.
“The scheme we eventually adopted comprises three payments: 50% of base salary on 30 April, 2025; 50% on completion of our second restructuring plan or, if earlier, December 2025; and a final payment of 200% of base salary in June 2026.
“The plan amounts to £18.5m in total, spread across the three separate payments over two years and shared between the 21 individuals, assuming a successful restructuring process.”
Sir Adrian’s letter states that 21 members of Thames Water’s senior management team received a first payment at 50% of base salary on 30 April 2025, under this plan, but that “the Board does not intend to recover this money”. The letter says that the 21 individuals who received payment did not include Sir Adrian himself, CEO Chris Weston, or CFO Steve Buck. The letter says that the development of the scheme was overseen by Thames’ Remuneration Committee.
Secretary of State for Environment, Food and Rural Affairs, Rt Hon Steve Reed MP, has stated that all payments made since April 2024 could be blocked by Ofwat.
EFRA Chair, Alistair Carmichael responded:
“As a Committee, we are trying to seek clarity as to whether these payments fall within the remit of the Government’s ban and will be recouped, given that they were not paid to the company’s CEO or CFO and are termed by Thames Water as “retention payments” rather than bonuses.
“We are also asking whether Defra and Ofwat were aware of these payments and what undertakings they have received from Thames Water about the pausing or withdrawal of the retention plan. Given that the plan includes two further retention payments, including 200 per cent of base salary due to be paid to these 21 individuals in June 2026, it is vital that Thames Water, Defra and Ofwat are clear with us all about what exactly is going on.”
Commenting on the news, Gary Carter, National Officer at GMB Trade Union, said:
“Thames Water is sinking under a torrent of debt, fines, and pollution.
“It is obscene that the company think it’s acceptable to dish out £18 million in extras to twenty one senior managers.
“These payouts are a kick in the teeth to the frontline workers getting a 4% pay rise and the customers who’ve seen their bills hiked up by hundreds of pounds a year.
“Thames Water is laughing in the face of the Government and regulators’ freeze on bonuses – the only way to stop this is nationalisation.”
