Thames Water paid chief £57k for holiday he did not take

Thames Water paid its chief executive more than £57,000 for annual leave he did not take, despite the company remaining mired in debt and facing intense scrutiny over executive pay.

Table of Contents

The payment emerged as environment secretary Emma Reynolds condemned the utility’s wider remuneration arrangements as “outrageous”, accusing water companies of attempting to sidestep government restrictions on executive bonuses.

Reynolds said: “It’s outrageous that one of the worst-performing water companies is handing out bonuses and inflation-busting pay rises to its executives.

“It flies in the face of basic fairness, and the British public are right to be furious.

“We’ve banned bonuses for polluting water bosses and will be taking action to prevent bonuses by any other name.”

Thames Water’s annual report shows chief executive Chris Weston received £57,244 after the company’s remuneration committee exercised its discretion to buy back a “significant remaining balance” of annual leave he was unable to take during the year.

The committee said the payment was made on an exceptional basis because the “very material commitment” required to lead the crisis-hit company had restricted his ability to take his contractual holiday entitlement. Based on his salary, the payment equates to around three and a half weeks’ leave.

The holiday buy-back formed part of a wider increase in Weston’s remuneration. His total pay rose to £1.16 million in the year to 31 March, up from £1.04 million the previous year, including a £99,000 deferred retention payment. His basic salary also increased by 14% from 1 April to £995,000.

The disclosures come as Thames Water revealed it paid £4.09 million in bonuses to key management personnel under its management retention plan during the year, up from £2.8 million the previous year. The payments included retention awards and performance-related bonuses made before new restrictions came into force.

The UK’s largest water supplier continues to struggle under debts of around £18.5 billion and remains at risk of temporary nationalisation.

The Water (Special Measures) Act, introduced last year, gave regulator Ofwat powers to ban performance-related bonuses for executives at water companies failing customers and environmental standards.

Weston said his £99,000 retention payment had been awarded before the legislation came into effect and confirmed he did not receive a performance-related bonus for 2025-26.

However, Thames Water has already faced criticism over its use of retention payments, with critics arguing they undermine the intention of the government’s crackdown on executive rewards. Last December the company agreed to pause £2.46 million of retention payments due to 21 senior executives after public backlash, having already made similar payments earlier in the year.

In its annual report, the remuneration committee defended its approach, saying it fully complied with the legal restrictions on performance-related pay but warned that the rules now materially limit its ability to reward executives leading the company’s turnaround.

It added that the restrictions created “a real risk to the retention of experienced leaders with the capability to deliver this transformation in exceptionally challenging circumstances.”