Thames Water: Debt-riddled UK water firm says it will increase salaries of executives if Ofwat limits bonuses
Troubled Thames Water has threatened to increase the salaries of its executives if Ofwat goes through with plans to limit bonuses.
The company, which serves more than 16 million customers across the London area and the Thames valley, has told Ofwat it intends to raise base executive pay. Thames told Ofwat that the bonus proposals would make it hard to attract talent to the sector, according to a report submitted in early December by the company’s regulatory strategy committee to the regulator’s board, the Financial Times reported.
“We have made it very clear to Ofwat that, if it proceeds with its proposals, it is highly likely that base pay will need to be increased to compensate for the loss of performance-related pay plans,” said the report by Jonathan Haskins, the chief risk and compliance officer at Thames Water. He added: “We also highlight the impact the proposals will have on attracting, retaining and motivating critically needed talent across the sector, and the importance of this for attracting investment.”
Chris Weston, the chief executive of Thames Water, said last month that it needed to offer “competitive packages” to attract talent, as he defended bonuses worth £770,000 that were awarded to him and the company’s finance chief. Weston was awarded £195,000 for his first three months at Thames, in early 2024.
Feargal Sharkey, the former Undertones lead singer turned campaigner, said Thames’s demand showed that banning water chief executive bonuses was “nothing but ineffectual, cheap political posturing”. He added: “The simple truth is if they want to change the culture they need to change the whole ethos of Ofwat and the water companies.
“Ofwat can already set limits on CEO pay by setting an enforcement order. CEOs are always going to try to make as much money for themselves as they can without a care about the environment.”
The national officer of the GMB union, Gary Carter, said: “Thames Water has no shame and scant regard for public opinion. Customers’ bills are going up and the money is going to fat cat bosses. It’s unscrupulous and utterly abhorrent.”
It comes as Thames hopes to secure a £3bn emergency funding package, which it has described as essential to ensure the company has enough money to stave off temporary nationalisation. The water firm previously said it only has enough cash to continue operating until May 2025. It also has more than £15 billion of debt.
Sir Adrian Montague, chairman of Thames Water, previously said: “The board and leadership team remain focused on stabilising the business. There will be further stages and we will continue to work collaboratively with our many stakeholders as we look to attract new equity into the business and seek a final determination that enables the delivery of our ambitious business plan for the next five years.”