Thames Water has “withdrawn” plans to pay senior bosses bonuses linked to the corporate securing a £3bn emergency mortgage, the setting secretary has stated.
Steve Reed confirmed the proposals had been dropped throughout an Atmosphere, Meals and Rural Affairs (Efra) committee session with MPs on Tuesday.
The so-called retention plan would have amounted to 50% of senior bosses’ salaries – resulting in them getting £1m on prime of their annual salaries and common bonuses.
The funds have been linked to the struggling firm securing a rescue loan of as much as £3bn to stave off collapse earlier this 12 months.
The corporate’s chairman had earlier within the day admitted to incorrectly stating the retention plan was “insisted upon” by lenders.
Thames Water had been “attempting to bypass” upcoming guidelines that may ban water firms from paying bonuses by “calling their bonuses one thing completely different”, Mr Reed informed MPs.
“It was the unsuitable factor to do,” he stated. “It offends in opposition to their very own prospects’ sense of honest play.”
A spokesman for Thames stated: “It has by no means been the Thames Water board’s intention to be at odds with the federal government’s ambition to reform the water trade.”
The corporate’s board “has determined to pause the retention scheme and await forthcoming steerage from the regulator” in relation to the brand new guidelines, he added.
In a letter to the committee, Thames Water’s chairman Sir Adrian Montague stated he might have “within the warmth of the second […] misspoken” when he was quizzed on the agency’s turnaround at an Efra session final week.
Thames Water chairman Sir Adrian Montague addressing the committee final Tuesday. Pic: Home of Commons/UK Parliament
Thames Water is England’s greatest water agency, supplying round 16 million households throughout London and the South East.
It has been on the centre of rising public outrage over the extent of air pollution and rising bills – which have inched greater whereas executives have been paid huge bonuses.
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New guidelines from the Water Providers Rules Authority (Ofwat) imply bonus funds to bosses might be banned if firms fail to satisfy requirements to guard the setting, customers and firm funds.
It might additionally block funds funded not simply by buyer cash, however by lenders and shareholders.
