Hosepipe-ban billpayers fund Thames Water’s £1m bonus
Thames Water customers under a hosepipe ban are funding a £1m bonus for the firm's new finance chief, paid from emergency creditor loans.
Thames Water customers banned from using a hosepipe, on pain of a £1,000 fine, are footing the bill for a £1m bonus handed to the company’s new finance chief.
The payment to chief financial officer Steve Buck was made at the end of July, funded from the emergency lending facility Thames Water’s creditors provided to keep the company solvent. It only came to light when chairman Sir Adrian Montague wrote to the Commons Environment, Food and Rural Affairs Select Committee last week, confirming the £1m Thames Water bonus alongside a £99,000 retention payment for chief executive Chris Weston and payments to a further dozen senior executives.
That disclosure lands in the middle of a drought Thames Water itself cannot get a grip on. The hosepipe ban has covered its entire supply area, from London to the Home Counties, since 23 July, with breaches a criminal offence. Since the ban began, the company has lost more than 10.7 billion litres of drinking water to leaks it has not fixed, even as it tells millions of customers to let their lawns go brown and demand runs up to 10% above normal across the Thames Valley.
Behind that failure sits a company carrying more than £20bn in debt, much of it built up under a private-equity ownership model that extracted dividends while pipes and sewers went unrepaired. Under the Water (Special Measures) Act, Ofwat has barred Thames Water and at least seven other water companies from paying performance bonuses over their environmental record. Buck’s payment escapes that ban only because it is contractual rather than discretionary: agreed when he joined from Pennon Group and Anglian Water in April 2025, and delayed from June to July after the company took legal advice on its obligations.
Thames Water bonus payouts defy government ban on executive rewards The £1m sits on top of £591,000 in pay for the year to March, including a £25,000 discretionary sum the company says covered the costs of his recruitment. His base salary has since risen to £630,000. Weston’s total package was £1.2m. Altogether, Thames Water has now disclosed more than £4m in retention payments to a dozen serving executives and two who have already left, a sum it calls “less than originally proposed.” Thames Water calls Buck’s payment a retention necessity. Customers rationed to a watering can, and facing bills rising up to 35% over five years, are entitled to call it something else.
‘Unacceptable’, says No 10
Alistair Carmichael, who chairs the EFRA committee, said the government “were clear in the early days that they wanted this to stop,” adding: “It is obvious that they have not succeeded in this. We need to hear now from them about what they intend to do about it.” Amy Fairman of River Action called the payments “indefensible” and urged ministers to put Thames Water into special administration. A No 10 spokesman said it was “unacceptable that one of the worst-performing water companies is handing out huge payments.” Montague has defended the sum as a “necessary incentive” to retain the leadership needed for the company’s “turnaround.”
Thames Water has warned it could run out of money again by October without a finalised rescue deal with its creditors, one that would also waive its outstanding regulatory fines until 2030. Its customers, meanwhile, are rationed to a watering can.
