Thames Water halts bosses bonus scheme

Thames Water has determined to “pause” its scheme to pay out giant bonuses to senior executives related with securing its £3bn rescue mortgage.

The resolution comes after Downing Street stated bosses on the stricken company “rewarding themselves for failure is clearly not acceptable”.

The corporate’s “retention scheme” was once set to quantity to 50% of senior bosses’ pay packets, which may have ended in them getting £1m on best in their annual salaries and common bonuses.

Thames were accused through the surroundings secretary of “trying to circumvent” approaching regulations to prohibit water corporations from paying bonuses.

Steve Reed informed MPs on Tuesday the corporate were “calling their bonuses something different so they continue to pay them”.

Downing Street added ministers have been “clear that, after presiding over years of mismanagement, Thames Water should not be handing itself bonuses”.

A spokesperson for Thames stated in a commentary that following discussions, its board had “decided to pause the retention scheme” and look ahead to steerage from the regulator Ofwat, who may well be granted new regulations to forestall any water companies from handing out any bonuses.

Thames stated it could stay up for the regulator’s steer to make sure the corporate’s “approach supports both our turnaround objectives and broader public expectations”.

“It has never been the Thames Water board’s intention to be at odds with the government’s ambition to reform the water industry,” the spokesperson added.

Thames has confronted heavy complaint over its functionality lately following a sequence of sewage discharges and leaks.

Since the dire state of the corporate’s funds first emerged about 18 months in the past, the federal government has been on standby to position Thames into particular management.

The corporate secured an emergency £3bn mortgage in March to stave off cave in and is now taking a look to cut back its large £20bn debt pile through requiring lenders to simply accept a cut price in what they’re owed.

The provider serves a couple of quarter of the United Kingdom’s inhabitants, most commonly throughout London and portions of southern England, and employs 8,000 folks. It is anticipated to expire of money totally through mid-April.

Regardless of what occurs to the corporate sooner or later, water provides and waste services and products to families will proceed as standard.

Reed stated he was once “very happy” that Thames had dropped its retention scheme.

“It was the wrong thing to do. It offends against their own customers’ sense of fair play,” he added.

Thames in the past stated its “retention payments” weren’t performance-related bonuses coated through the brand new regulations.

It stated none of those retention bills can be funded through shoppers.

Earlier on Tuesday, Thames chairman Sir Adrian Montague clarified feedback he had made about bonuses to a committee of MPs final week.

He stated he may have “misspoken” when he mentioned lenders had “insisted” upon the “retention incentives” when wondered at the stricken water company’s turnaround.

“We live in a competitive marketplace and we have to provide the right sort of packages to these people otherwise the head hunters come knocking,” he stated on the time.

Last November, Ofwat blocked 3 water companies – together with Thames, Yorkshire Water and Dwr Cymru Welsh Water – from the usage of buyer cash to fund a complete of £1.6m in bosses’ bonuses.