Thames Water has decided to postpone a series of controversial bonus payments worth millions of pounds to its top executives, following intense political pressure and scrutiny of the crisis-hit utility.
Deferred Payments Amid Political Outcry
The company's remuneration committee has opted to defer roughly £2.46 million in retention awards that were due to be paid to 21 senior managers this month. The decision, taken after recent board deliberations, puts the payments on hold until further notice. Sky News first revealed the board's discussions, which have occurred as Thames Water races to finalise a multibillion-pound rescue plan led by its creditors.
The move stops short of cancelling the bonuses outright, a nuance that critics may label a fudge. However, it avoids a potentially explosive pre-Christmas row over executive pay at a time when the company is pleading for financial leniency. Both the government and the water regulator, Ofwat, were notified of the decision this week.
Mounting Pressure from Regulators and MPs
The planned payouts had already attracted fierce criticism from politicians. Alistair Carmichael, the Liberal Democrat MP who chairs the Commons environment, food and rural affairs select committee, branded the prospect of such awards "an outrage" given the firm's perilous finances. He had previously written to Thames Water's chairman demanding clarity on the payments by December 1.
This latest bonus round follows a similar payment made earlier in the year. Furthermore, a much larger award of approximately £13.5 million is scheduled to be paid under the same retention scheme during 2026. Notably, Thames Water's chief executive, Chris Weston, is not among the executives eligible for these retention payments. He is already subject to a bonus ban imposed by Ofwat under new rules targeting underperforming water companies.
The Broader Survival Battle
The deferral comes against the backdrop of Thames Water's desperate fight for survival. The company is seeking Ofwat's approval for a complex rescue deal that would see its largest creditors inject about £5 billion of new funding into the business. In return, these creditors would write off billions of pounds in existing debt and seek greater regulatory leniency on future environmental penalties and targets.
Without a successful agreement, the company faces the prospect of being effectively nationalised through a Special Administration Regime (SAR). Sky News revealed during the summer that the government had contingency plans for such an outcome, lining up FTI Consulting to prepare. Thames Water's battle for a future is expected to continue well into next year. The company declined to comment on the specific decision regarding the retention awards.
