Thames Water paid its finance chief a £1m signing-on fee in July, despite the company facing significant debt and potential temporary nationalization.

Thames Water paid its finance chief, Steve Buck, a £1m signing-on fee in July. The payment was disclosed in a letter from company chairman Sir Adrian Montague to the Commons Environment, Food and Rural Affairs Committee. Buck joined the utility company in April 2025, but the payment was delayed until last month while the firm sought legal advice regarding its contractual obligations.

Justification for Executive Pay

Sir Adrian Montague acknowledged that customers might view such payments as "unjust" but defended the bonus as a "necessary incentive" to prevent staff from leaving. He stated that the funds were provided by the company's lenders through emergency funding. According to Montague, the company faces significant recruitment and retention challenges that would persist if the firm were placed into special administration.

Financial and Regulatory Challenges

Thames Water currently holds approximately £20bn in debt and has warned that its cash reserves may only last until the end of the year. The company is currently negotiating with creditors and the government regarding a potential rescue deal that could involve debt write-offs and new investment. If a deal is not reached, the firm could face a special administration regime, which would involve temporary government-appointed management.

Criticism and Political Response

Alistair Carmichael, chair of the Environment Committee, criticized the payment, stating that money should be prioritized for service improvements rather than executive remuneration. The company has faced ongoing scrutiny for sewage discharges and infrastructure leaks, including a record £122.7m fine from the regulator Ofwat last year. Thames Water serves 16 million people across London and the Thames Valley.