Thames Water in £1 million payout despite cash woes

Thames Water has sparked outrage after handing a delayed £1 million “golden handshake” to its chief financial officer and agreeing controversial retention payouts to top bosses as it battles to secure its financial future.

The supplier, which is sinking under a debt pile of more than £20 billion, disclosed in a letter to the Environmental, Food and Rural Affairs Committee that it had made the so-called signing-on payment to Steve Buck at the end of July from an emergency lending facility from creditors.

In the letter sent last week to committee chair Alistair Carmichael, Thames Water chair Sir Adrian Montague said the payment was a “necessary incentive” to Mr Buck in joining the utility provider when he was appointed in April 2025, but that it had been deferred when wider retention payments were put on hold.

It is understood the payment was made after legal advice.

Thames Water also said it had agreed individual settlements over what it calls retention payments for a dozen top bosses, plus two who have now left the business, despite a furore late last year over them.

Details of the payments have emerged as Thames Water is fighting to secure a rescue deal proposed by its senior creditors to avoid collapse and being placed in temporary nationalisation by the Government.

The payouts also add to growing evidence the sector is able to side-step last year’s Water (Special Measures) Act banning performance-related bonuses for bosses at utilities failing customers and the environment.

Thames Water agreed last year to pause £2.46 million of retention payments to 21 top bosses, having already paid out a similar amount earlier in 2025.

The operator declined to comment further on the payouts detailed in the letter and has not disclosed how much it has agreed to pay.

But it is understood the payments are less than originally proposed, which it had been due to make last December and in June this year.

The letter confirms the payments will be finalised in the “coming weeks” after seeking legal advice and have been deferred where possible.

Sir Adrian said in the letter: “I understand that for customers who believe, rightly, that they have not received the service they deserve, it feels unjust that senior leaders of the company receive significant compensation.

“However, we need those senior leaders to remain in post to continue the good progress made on the turnaround.”

River Action said the payments were “indefensible”.

Amy Fairman, the group’s head of campaigns, said: “Put Thames Water into special administration and rebuild it to serve its customers and clean up our rivers, not reward failure.”

Cat Hobbs, director of public ownership campaign We Own It, added: “It’s criminal to let this rip-off continue with 16 million households paying the price.”

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