Ministers may block Thames Water executives from receiving bonuses from an emergency loan of PS3bn.
Adrian Montague, Thames Water’s chairperson, said that the company was “hair-raising” in its finances. He told MPs it was “close to completely running out of funds”.
He told the committee, too, that some of the executives of the company were eligible for a payout of 50% of their salary under the debt package approved earlier this year by the High Court.
According to government sources, the Guardian newspaper has learned that bonuses may be banned as early as next month.
The Water (Special Measures Bill) will give the water regulator Ofwat power to prohibit financial rewards for executives who preside over a failing business. Thames Water could be classified as a failing company due to its debt levels and poor track record in sewage.
Chris Weston, the chief executive of the company, was paid PS195,000 per month for his work in January 2024. This is part of a total package of PS2.3m.
He told the Select Committee: “I joined Thames, because it is important to society. In the first three month I made a difference.
Montague explained to the audience that the bonuses would be paid out in three phases: at the completion of the first restructuration plan, then at the conclusion of the second phase and finally at the final stage.
We have a bonus system to protect our most valuable resource, the senior management team.
In spite of rising water bills and infrastructure problems, executives at water companies received bonuses worth PS9.1m last year.
A Thames Water spokesperson said to the Guardian that “Thames Water has begun a complex restructuring and turnaround process in order to deliver better results for both our customers and our environment, and also seek a solution long-term regarding our financial stability.”
It is important that the company retains those employees who are best suited to deliver the improvements our stakeholders expect.
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