Thames Water bosses face fresh grilling from MPs over bonus row
Thames Water bosses have been hauled back in front of MPs after accusations of a “lack of transparency” surrounding bonuses carved out of an emergency loan.
The crisis-hit utility has refused to take back nearly £2.5m it paid to a host of senior managers from the £3bn lifeline provided by creditors earlier this year.
Some 21 managers on a base salary range of between £100,000 and £500,000 cashed in on the first tranche of payouts, according to documents published by parliament’s environment committee. They are currently in line for around £18.5m, spread across seperate payments over two years.
In a letter to the chair of the environment committee, Thames Water chair Sir Adrian Montague said there had been “no discussions” with either Defra or Ofwat in relation to recovering payments “which have already been made.” The remuneration plan, known as the Management Retention Plan (MRP), remains paused as of May.
The MRP was first revealed in a parliamentary committee in May when Montague falsely informed MPs that creditors had “insisted” on it. He will face MPs for a second time on 15 July alongside chief executive Chris Weston and Ian Pearson, the former cabinet minister and non-executive director.
A seperate letter to the committee from Ofwat outlined the regulator’s disappointment in the “lack of transparency” shown by Thames Water in regard to the bonus scheme.
It added the payouts would not fall within the scope of new rules banning underperforming utilities from paying out excessive bonuses. Montague and Weston are not viable for the MRP.
“At a time when remuneration in the water sector is under significant public scrutiny,
we expect water companies to be proactive and transparent and share any information that
may relate to our regulatory requirements, such as executive remuneration,” chief executive David Black wrote.
Thames chair keeps KKR talks under wraps
Thames Water has been battling to stave off special administration amid debts of around £20bn.
Its rescue plan was dealt a hammer blow in June after the private equity giant KKR abandoned a £4bn bid for the company.
Montague, a City veteran, has refused to provide minutes of discussions relating to the KKR proposal to MPs, arguing it would “undermine the successful conclusion of a live transaction which remains subject to negotiation.”
He offered the chair a private discussion on the matter instead, but this was refused. It is “unfortunate that recent evidence given to the committee has been inaccurate and has had to be clarified to such a degree that it has removed the possibility of our working together on the basis of trust,” Carmichael wrote, adding that a private briefing would not be “appropriate in these circumstances.”