Thames Water has opted not to pay more than £2m in retention awards to more than 20 of its top executives this month amid a political outcry over the payments.
Sky News has learnt that the embattled utility’s remuneration committee has decided to defer roughly £2.46 million in payouts until further notice, following discussions among directors in recent days.
The decision not to permanently cancel or hand over the awards risks being labelled a fudge by critics of the company, but it also avoids the possibility of a pre-Christmas bonus row as Thames Water races to finalise a multibillion-pound rescue led by its largest group of creditors.
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The government and Ofwat, the water industry regulator, received notification of the bonus decision this week, according to sources.
The £2.46m payouts, which have attracted fierce scrutiny from the Commons Environment, Food and Rural Affairs Select Committee, follow a similar payment that was made earlier this year.
The retention scheme schedule anticipates a larger award of approximately £13.5m in 2026.
Alistair Carmichael, the Liberal Democrat MP who chairs the select committee, told The Daily Telegraph after Sky News had revealed the Thames Water board discussions: “Given the perilous state of Thames Water’s finances, for a remuneration committee to award bonuses to already well-paid executives would be an outrage.”
Last month, Mr Carmichael wrote to Sir Adrian, requesting a response by December 1 regarding the distribution of the money.
Chris Weston, Thames Water’s chief executive, is already the subject of a bonus ‘ban’ imposed by the regulator, Ofwat, under new rules preventing payouts at water companies which are failing to meet environmental, financial resilience or consumer standards.
He is not among the 21 executives eligible for the retention payments.
Thames Water’s survival battle will continue until well into next year as it seeks Ofwat’s approval for a deal that will involve creditors injecting about £5bn into the business.
They would also write off billions of pounds in debt they are owed in return for greater leniency from regulators over future environmental penalties and targets.
In the absence of an agreement, a process known as a Special Administration Regime would effectively nationalise Thames Water.
Sky News revealed during the summer that the government was lining up FTI Consulting to draw up contingency plans for such an outcome.
On Tuesday, Thames Water declined to comment on the retention awards decision.
