Thames Water halts bosses bonus scheme | EUROtoday

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

The choice comes after Downing Street mentioned bosses on the troubled agency “rewarding themselves for failure is clearly not acceptable”.

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

Thames had been accused by the setting secretary of “trying to circumvent” forthcoming guidelines to ban water corporations from paying bonuses.

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

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

A spokesperson for Thames mentioned in a press release that following discussions, its board had “decided to pause the retention scheme” and await steerage from the regulator Ofwat, who might be granted new guidelines to stop any water companies from handing out any bonuses.

Thames mentioned it might anticipate 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 criticism over its efficiency lately following a collection 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 place Thames into particular administration.

The firm secured an emergency £3bn mortgage in March to stave off collapse and is now trying to scale back its large £20bn debt pile by requiring lenders to simply accept a reduction in what they’re owed.

The provider serves a couple of quarter of the UK’s inhabitants, principally throughout London and components of southern England, and employs 8,000 folks. It is anticipated to expire of money utterly by mid-April.

Regardless of what occurs to the corporate sooner or later, water provides and waste companies to households will proceed as regular.

Reed mentioned he was “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 beforehand mentioned its “retention payments” weren’t performance-related bonuses coated by the brand new guidelines.

It mentioned none of those retention funds could be funded by prospects.

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

He mentioned he may need “misspoken” when he acknowledged lenders had “insisted” upon the “retention incentives” when questioned on the troubled water agency’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 mentioned on the time.

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