Thames Water's £1million payment to chief sparks calls for special administration

Thames Water has faced fresh calls to be placed into special administration after its chief financial officer Steve Buck received a £1million signing-on payment.

Mr Buck, who joined Thames Water from Pennon Group in April 2025, received the payment last month through an emergency lending facility provided by the company’s creditors.

The payment had been delayed while a wider management retention scheme was suspended.

A letter from chairman Sir Adrian Montague to MPs, made public on Monday, also disclosed that the heavily indebted company had agreed individual retention arrangements with 14 senior executives.

Two of those executives have since left the company, with agreements reached to resolve potential liability claims following the expiry of the retention plan in June.

The disclosures prompted renewed calls for the Government to intervene over Thames Water’s executive remuneration.

The Prime Minister’s official spokesman said: "It's unacceptable that one of the worst-performing water companies is handing out huge payments to its executives when it should be focusing on improving performance and rebuilding public trust."

The spokesman pointed to the Government’s ban on bonuses for water company bosses responsible for pollution.

He said: "We've banned bonuses for polluting water bosses. We expect companies to follow both the letter and the spirit of the rules."

The Government said it was awaiting the conclusions of a review by regulator Ofwat, which will examine whether existing restrictions on executive remuneration should be strengthened.

Thames Water has around £21billion of debt, with the company’s financial position remaining a key issue as ministers consider proposals for its future.

Amy Fairman, who leads campaigns at River Action, described the payments as "indefensible" and called for the company to be placed into special administration.

She said the Government should "put Thames Water into special administration and rebuild it to serve its customers and clean up our rivers, not reward failure."

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Alistair Carmichael, the Liberal Democrat chairman of the Commons environment, food and rural affairs committee, also questioned ministers over how they intended to prevent water companies from circumventing the ban on bonuses introduced through last year’s Water (Special Measures) Act.

Mr Carmichael said: "We need to hear now from them about what they intend to do about it."

Sir Adrian Montague acknowledged in his correspondence with MPs that customers who believed they had received poor service could view the executive payments as unjust.

However, he argued that Thames Water needed to retain its senior leadership to maintain progress with its turnaround plans.

Sir Adrian said: "Management faced, and still faces, the challenge of delivering the biggest infrastructure upgrade in 150 years against the backdrop of the largest and most complex recapitalisation the UK has seen."

The chairman also argued that placing Thames Water into special administration or public ownership would not remove the need to recruit and retain experienced executives.

He said any future operator would face the same challenge of attracting senior staff, and that additional payments could still be required to secure and motivate key personnel.

Thames Water’s creditors include Apollo Global Management, Elliott Management and Silver Point Capital, which collectively hold around £17billion of the company’s £21billion debt.

The lending group has offered concessions to Andy Burnham’s administration as it seeks to secure a restructuring deal and avoid Government intervention, including proposals to give the state a “golden share” in the restructured company.

An earlier creditor plan included £3.3billion in fresh equity, £6.3billion in new lending and the cancellation of £9.6billion of existing debt.

The package is intended to provide Thames Water with new funding while addressing a substantial portion of its debt burden.

However, creditors have signalled they are prepared to challenge the Government if ministers reject the deal.

They have instructed Pallas Partners, a litigation and disputes specialist, to prepare for a potential legal confrontation with the Government.