Thames Water has performed a dramatic U-turn, deciding not to proceed with nearly £2.5 million in contentious bonus payments to its senior leadership. The move follows intense political scrutiny and public anger directed at the financially troubled utility giant.
Bonus Plan Shelved Following Political Pressure
The company had been poised to hand out £2.46 million in so-called 'retention awards' to 21 of its top executives. These payments were designed to incentivise the senior team to remain with the beleaguered business. However, after discussions between directors in recent days, the board has opted to defer the plan indefinitely.
This decision, first reported by Sky News, comes after the same group of executives received an identical sum of £2.46 million in similar payments earlier this year. The firm's chief executive, Chris Weston, was not in line for this latest bonus round, as he is already subject to a bonus ban imposed by the industry regulator, Ofwat.
MPs and Public Express 'Fury' Over Payments
The planned payouts had sparked a significant backlash. Alistair Carmichael, the chairman of the Environment, Food and Rural Affairs Select Committee, had contacted Thames Water in recent weeks to raise serious concerns. He demanded confirmation on whether the bonuses would be distributed.
Reacting to the deferment on Tuesday, Mr Carmichael stated: "It’s important that the focus of Thames management is on turning round the company and not on rewarding staff and having to handle negative headlines." He emphasised that "the public is rightly furious" at the prospect of senior staff in a company with Thames Water's performance record receiving such bonuses, adding that his committee would continue to monitor the situation.
Ongoing Rescue Talks and Financial Performance
This controversy unfolds against a backdrop of critical negotiations over the firm's future. Just a fortnight ago, Thames Water confirmed it remains locked in talks with creditors and the Government to secure a rescue deal aimed at repairing its stricken finances.
Despite its well-documented troubles, the company's half-year results revealed a surge in underlying earnings. For the six months to September 30, earnings jumped to £1.2 billion, up from £715.1 million a year ago. Revenues increased by 42%, driven by bill hikes. Thames Water stated these increased revenues also helped fund £1.3 billion of capital investment targeted at fixing leaks, reducing sewage spills, and improving water quality for its 16 million customers.
Thames Water has declined to comment on the bonus deferment.
