Thames Water halts plans to hand £2.5m retention bonuses to bosses

Thames Water has decided not to go ahead with almost £2.5 million in controversial payments to senior bosses.

The debt-laden utilities giant faced a political outcry over plans to hand out the money.

Thames Water was expected to hand £2.46 million to 21 senior executives in so-called retention awards to encourage them to stay with the business.

However, the company has deferred this until further notice following talks between directors in recent days.

The deferment, which was first reported by Sky News, comes after the 21 executives received a previous £2.46 million worth of payments earlier this year.

Chris Weston, Thames Water’s chief executive, was not among those set to receive a bonus and is already the subject of a bonus ban from industry regulator Ofwat.

Thames Water has declined to comment.

Alistair Carmichael, chairman of the Environment, Food and Rural Affairs Select Committee, contacted the company in recent weeks raising concerns over the plans for further payments and asked for confirmation about whether the money would be handed out.

On Tuesday, he said: “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.

“The public is rightly furious at the prospect of senior staff in a company with the performance record of Thames receiving bonuses.

“We will continue to monitor this situation.”

It comes a fortnight after Thames Water said it was still locked in talks over its proposed rescue with creditors.

Britain’s biggest water supplier, with around 16 million customers, said discussions were “positive” but ongoing with the Government and regulators to agree a deal to turn around the firm and repair its stricken finances.

Half-year results from the provider revealed underlying earnings surged to £1.2 billion for the six months to September 30, compared with £715.1 million a year ago.

Revenues rose by 42% thanks to bill increases, which it said also helped fund £1.3 billion of capital investment to fix leaks, cut sewage spills and improve water quality.