Thames Water plans to raise executive salaries if regulators restrict bonuses, prompting backlash from unions and campaigners. The utility, facing a £17 billion debt crisis and potential bankruptcy, seeks to avoid a taxpayer bailout while contemplating a price hike for 16 million customers. CEO Chris Weston, who received a £195,000 bonus amidst rising pollution incidents, may still qualify for annual bonuses. Proposed legislation could enable Ofwat to ban performance-related bonuses for underperforming companies, while Thames Water argues higher basic pay would be necessary if the plan goes ahead. It’s also pursuing a £3 billion loan for operations until May 2026.
Troubled utility company Thames Water plans to increase executive pay if regulators limit the amount of bonuses it can pay.
The move sparked a fierce backlash from trade unions and campaigners, but Britain’s biggest water supplier reportedly wants to reward senior executives with big pay rises.
This is despite the company being hit by a crisis and on the verge of bankruptcy with only enough cash to survive until March.
Thames Water is scrambling to avoid a taxpayer bailout as losses mount and debts pile up to the tune of £17bn.
And it comes amid the power company’s plans to increase prices by at least a third for 16 million customers in London and the south east.
Thames Water and its peers have also come under fire for dumping sewage into Britain’s lakes and rivers.
The group’s chief executive Chris Weston last month did not rule out receiving an annual bonus despite a 40% jump in pollution incidents.
Weston’s annual salary totals £2.3 million and he earned a £195,000 bonus after just three months at the company after joining in January last year.
Thames Water is scrambling to avoid a taxpayer bailout as losses mount and debts pile up to the tune of £17bn. Photo: Stock Image
The group’s chief executive Chris Weston last month did not rule out receiving an annual bonus despite a 40% spike in pollution incidents.
The government plans to introduce legislation this year that would allow regulator Ofwat to ban performance-related bonuses if companies underperform expectations.
In its report, Thames Water said: “We have made clear to Ofwat that if it goes ahead with its proposals it is likely to require an increase in basic pay to compensate for the loss of its performance pay plan. I told him,” he said. The Financial Times reported.
He warned that the proposal would make it difficult to attract and retain top talent.
Unified National Energy and Utilities Executive Simon Cope said: “This is a complete disgrace.” Thames is once again focused on paying its chief executive and senior executives more than addressing the company’s failures. ”
High Pay Center spokesman Andrew Speke said the move showed Thames Water was “really out of touch”.
“There will also be questions about whether the current level of regulation and the level of regulation the government is planning is sufficient,” he said.
“Such actions only further reinforce the impression that water privatization has been a grave failure.”
Thames Water declined to comment. Ofwat did not respond to requests for comment.
Thames Water is seeking a £3bn loan from its creditors, which will allow it to continue operating until May 2026, by which time it plans to complete a separate search for a new owner. However, the plan is opposed by a group of small financial institutions.
And it was dealt a further blow last year when a court ruled Ofwat could increase customer bills by a third over the next five years, an amount sought by Thames Water. This was lower than the 59% increase.