Thames Water has “withdrawn” plans to pay senior bosses bonuses linked to the corporate securing a £3bn emergency mortgage, the surroundings secretary has mentioned.
Steve Reed confirmed the proposals had been dropped throughout an Surroundings, Meals and Rural Affairs (Efra) committee session with MPs on Tuesday.
The so-called retention plan would have amounted to 50% of senior bosses’ salaries – resulting in them getting £1m on high of their annual salaries and common bonuses.
The funds have been linked to the struggling agency securing a rescue mortgage of as much as £3bn to stave off collapse earlier this yr.
The corporate’s chairman had earlier within the day admitted to incorrectly stating the retention plan was “insisted upon” by lenders.
Thames Water had been “trying to circumvent” upcoming guidelines that may ban water corporations from paying bonuses by “calling their bonuses something different”, Mr Reed informed MPs.
“It was the wrong thing to do,” he mentioned. “It offends against their own customers’ sense of fair play.”
A spokesman for Thames mentioned: “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 corporate’s board “has decided to pause the retention scheme and await forthcoming guidance from the regulator” in relation to the brand new guidelines, he added.
In a letter to the committee, Thames Water’s chairman Sir Adrian Montague mentioned he might have “in the heat of the moment […] misspoken” when he was quizzed on the agency’s turnaround at an Efra session final week.
Picture:
Thames Water chairman Sir Adrian Montague addressing the committee final Tuesday. Pic: Home of Commons/UK Parliament
Thames Water is England’s greatest water agency, supplying round 16 million households throughout London and the South East.
It has been on the centre of rising public outrage over the extent of air pollution and rising payments – which have inched larger whereas executives have been paid big bonuses.
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Surfers protest towards water air pollution
New guidelines from the Water Companies Rules Authority (Ofwat) imply bonus funds to bosses may be banned if corporations fail to fulfill requirements to guard the surroundings, shoppers and firm funds.
It might additionally block funds funded not simply by buyer cash, however by lenders and shareholders.
