Debt-ridden water agency’s risk to HIKE bosses’ pay if regulators restrict bonuses – whereas firm battling to keep away from taxpayer bailout
Embattled utility firm Thames Water plans to hike executive pay if regulators limit how much it can hand out in bonuses.
In a move that sparked a fierce backlash from unions and campaigners, Britain’s biggest water supplier reportedly wants to reward its top brass with bumper pay rises.
That is despite a crisis that has engulfed the company, bringing it to the brink of collapse with just enough cash to survive until March.
Thames Water is scrambling to avoid a taxpayer bailout amid mounting losses and a £17billion debt pile.
And it comes as the utility plans to raise bills by at least a third for its 16million customers in London and the southeast.
Thames Water and its peers are also under fire for dumping sewage into Britain’s lakes and rivers.
Chris Weston, the group’s chief executive, last month refused to rule out accepting a bonus for the year despite a 40 per cent spike in pollution incidents.
Weston is on a total pay package of as much as £2.3million a year and pocketed a £195,000 bonus for just three months’ work after he joined in January last year.
Thames Water is scrambling to avoid a taxpayer bailout amid mounting losses and a £17billion debt pile. Picture: Stock image
Chris Weston, the group’s chief executive, last month refused to rule out accepting a bonus for the year despite a 40 per cent spike in pollution incidents
The Government is planning to bring in legislation this year that would allow the regulator Ofwat to ban performance-related bonuses if companies fall short of expectations.
‘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,’ Thames Water said in a report, seen by the Financial Times.
It warned that the proposals will make it harder to attract and retain top talent.
Unite national officer for energy and utilities Simon Coop said: ‘This is a complete disgrace. Once again Thames’ focus is about paying its chief executive and senior managers even more, rather than addressing the company’s failings.’
Andrew Speke, a spokesperson for the High Pay Centre, said the move would show Thames Water to be ‘truly out of touch’.
‘It would also raise questions about whether the current levels of regulation or the government’s planned levels of regulation are sufficient,’ he said.
‘Actions such as this will only add to the sense that the privatisation of water has been a serious failure’.
Thames Water declined to comment. Ofwat did not respond to a request for comment.
Thames Water is seeking a £3billion loan from its creditors which would allow the company to continue operating until May 2026, by which time it expects to have completed a separate search for a new owner. However, that plan is opposed by a group of smaller lenders.
And the firm was dealt a further blow last year when Ofwat ruled it could raise customer bills by a third over the next five years – less than the 59 per cent hike Thames Water was seeking.
