Thames Water CFO Steve Buck paid £1m retention bonus despite debt crisis
Chairman confirms payment to chief financial officer was made weeks after annual report claimed it was paused, drawing criticism from government ministers.
Thames Water has paid its chief financial officer, Steve Buck, a £1 million retention bonus, a move that risks reigniting political backlash against the utility as it battles a £20 billion debt pile. The payment, structured as part of a signing-on deal, was made last month despite regulatory restrictions designed to curb executive compensation during the company’s financial crisis.
The sum was classified as a retention fee rather than a performance-related bonus, allowing it to bypass special measures imposed by the water regulator, Ofwat. These measures explicitly ban the chief executive and chief financial officer from receiving performance-linked incentives. Buck, who previously served as finance chief at Pennon and Anglian Water, joined Thames in April last year as the company attempted to stave off nationalisation and implement a creditor-led rescue plan.
Sir Adrian Montague, Thames Water’s chairman, confirmed in a letter to the environment, food and rural affairs committee that the payment had been processed. This clarification came weeks after the company’s annual report stated the payment had been paused. Montague acknowledged the frustration felt by customers but argued that retaining senior leadership was essential to continuing the turnaround efforts, noting that the majority of the current management team were brought in to fix, rather than cause, the company’s problems.
The £1 million payment is double Buck’s previous annual salary of £500,000, which has since been increased to £630,000. While Buck received this retention fee, other executives have seen millions in bonuses delayed amid public outcry over the utility’s environmental record. Chief executive Chris Weston is prohibited from receiving a bonus under Ofwat’s rules, although he did secure a 14 per cent salary increase last year to nearly £1 million.
Government ministers have expressed strong opposition to executive payouts as Thames prepares a new offer to regulators involving significant debt write-offs and cash injections. Environment secretary Andy Burnham has called for nationalisation, while Chief Secretary to the Treasury Emma Reynolds previously labelled such bonuses as outrageous. The company faces severe liquidity constraints, with cash reserves sufficient only to operate through the end of the year, while more than 10 million customers remain under a hosepipe ban.
