Thames Water has paid a delayed £1 million “golden handshake” to its chief financial officer and agreed controversial retention payouts to top bosses despite its battle to secure its financial future.
Payment details revealed
The stricken supplier, which is sinking under a debt pile of more than £20 billion, disclosed in a letter to the Environmental, Food and Rural Affairs Committee that it had made the so-called signing-on payment to Steve Buck at the end of July from an emergency lending facility from creditors.
In the letter sent last week to committee chairman Alistair Carmichael, Thames Water chairman Sir Adrian Montague said the payment was a “necessary incentive” to Mr Buck in joining the utility when he was appointed in April 2025, but that it had been deferred when wider retention payments were put on hold. It is understood the payment was made after legal advice.
Retention payouts agreed
Thames Water also said in the letter that it had agreed individual settlements over what it calls retention payments for a dozen top bosses, plus two who have now left the business, despite a furore late last year over them.
Details of the payments have emerged as Thames Water is fighting to secure a rescue deal proposed by its senior creditors to avoid collapse and being placed in temporary nationalisation by the Government.
The firm agreed last December amid an outcry to pause £2.46 million of retention payments to 21 top bosses, having already paid out a similar amount earlier in 2025.
Payments less than originally proposed
Thames Water declined to comment further on the new retention payment scheme and has not disclosed how much it has agreed to pay out. But it is understood the payments are less than originally proposed, which it had been due to make last December and in June this year.
The letter confirms the payments will be finalised in the “coming weeks” after seeking legal advice and have been deferred where possible.
Chairman defends payments
Sir Adrian said in the letter: “Based on clear legal advice the company decided that reaching an individual agreement with each participant would be significantly cheaper and less disruptive than being in due course ordered by a court to make payment, with associated costs and damages.
“Importantly, this approach also provided the best opportunity of retaining the relevant employees.”
He added: “I understand that for customers who believe, rightly, that they have not received the service they deserve, it feels unjust that senior leaders of the company receive significant compensation.
“However, we need those senior leaders to remain in post to continue the good progress made on the turnaround and, as you are aware, the retention plan was put in place in April 2025 in response to the urgent need to retain these senior leaders at a time of significant uncertainty as to the future of Thames Water and uncertainty as to their own employment futures.”
Criticism from campaigners
River Action said the payments were “indefensible”.
The group’s head of campaigns, Amy Fairman, said: “Thames Water is on the brink of financial collapse with a debt pile of £20 million of debt, rivers in their region are drowning in sewage and 571 million litres of water are lost every day.
“Yet there’s still £1 million for a finance chief’s signing-on payment when over a quarter of Thames Water customer bills go to servicing debt.”
She added: “Put Thames Water into special administration and rebuild it to serve its customers, and clean up our rivers, not reward failure.”
