Thames Water gave finance boss a £1m signing-on fee

Thames Water, the UK's largest water company, recently granted its finance chief, Steve Buck, a £1 million signing-on fee in July. The company, grappling with a substantial debt burden and facing the possibility of nationalisation, had been struggling to attract and retain skilled professionals. Buck joined Thames Water in April 2025, and the substantial compensation did not come about until last month, after the company sought legal advice on its contractual obligations.

The payment, initially reported by Sky News, was detailed in a letter addressed to MPs on the Commons Environment, Food, and Rural Affairs Committee. In the letter, Thames Water chairman Sir Adrian Montague defended the decision, stating that the payment was a necessary incentive for the company's new leadership team, who have been brought in to address the company's financial challenges.

The letter highlighted that these individuals, who possess extensive experience and qualifications, could have pursued other opportunities in the private sector, which would have been more lucrative and less scrutinized. Montague emphasized that the payment was funded through emergency financing from Thames Water's lenders and warned that the company would continue to face recruitment and retention issues if nationalised or placed in special administration.

The government has criticized the company's decision, with the Prime Minister's official spokesman condemning the excessive compensation and calling for improved performance and increased public trust. Alistair Carmichael, Lib Dem MP and chair of the Environment Committee, criticized the company for prioritizing executive compensation over service improvements.

Ofwat's executive director, Helen Campbell, echoed these concerns, stating that excessive bonuses, especially those awarded without transparent reasoning, damage public trust. The utility company's financial situation is dire, with a debt of approximately £20 billion, and failure to reach an agreement could result in temporary government control of the company, potentially leading to taxpayer-funded debt repayment upon a future sale.

Thames Water's CEO, Chris Weston, has acknowledged the public anger over executive pay but argued that the company needs to offer competitive salaries to retain capable personnel. Despite the controversy, Weston supports a rescue deal proposed by the company's lenders, which would involve debt write-offs and new investments in exchange for leniency on environmental targets.

The previous Environment Secretary, Emma Reynolds, dismissed the proposal, while Angela Eagle now leads the government's response.