Thames Water increases bonus payments to £4m despite uncertainty over future

Annual results show struggling firm’s net debt has risen to £19.7bn, up from £17.7bn a year earlier

Thames Water increased its bonus payouts to £4.1m for senior managers, despite warning over “material uncertainty” over its future as it scrambles to recapitalise to avoid nationalisation.

The water company also gave a pay rise to its chief executive, Chris Weston, and drew the ire of Emma Reynolds, the environment secretary, for paying him a previously deferred bonus of £99,000 – despite a ban on bonuses because of pollution failures.

Total bonuses to “key management personnel” rose from £2.8m in the year to March 2025 to £4.1m. The bonuses went to members of the board and executive team other than the chief executive and finance boss, who are covered by the ban.

Thames, which has been held up as a symbol of the privatised sector’s failures, has been blamed for polluting rivers and waterways with sewage leaks and has struggled under a debt pile that is now approaching £20bn. It is now effectively under the control of its creditors, who are trying to negotiate a rescue deal after its shareholders walked away.

Thames said it had sufficient funding to survive until the end of the year, adding it continued to work with creditors, regulators and the government on a recapitalisation plan overseen by Weston and Julian Gething, one of the managing directors, who serves as the chief restructuring officer.

The company is also awaiting clarity on the intentions of Andy Burnham, who has suggested he is considering bringing Thames into temporary government control. Burnham, who is set to become prime minister within days, has called for “greater public control” over the utility and told the Guardian this could mean nationalisation.

Thames said in its annual results for the year to 31 March, published on Wednesday, that it was “reasonable to assume” that the company had “adequate resources” to keep going for another 12 months.

It reported that its net debt had risen to £19.7bn, according to one measure used by bondholders, up from £17.7bn a year earlier.

However, the company said its performance was improving as it reported underlying profit after tax of £204m compared with £13m a year earlier after the industry regulator, Ofwat, allowed it to increase household bills.

Thames remained subject to a government bonus ban for the second year after its introduction, but the company still paid Weston a £99,000 bonus. The bonus was deferred from a previous year, before the ban was introduced.

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.”

The bonus ban was introduced in response to public outrage over pollution. Thames said it had achieved an 18% reduction in pollution in the 12 months to the end of March compared with the same period a year earlier.

Despite this, Thames said it had only met 55% (11 out of 20) of Ofwat’s common performance commitment targets, although this was an improvement on the 38% it achieved a year earlier.

Restructuring specialist AlixPartners received £2.18m to cover the role of Gething and his staff.

The company also said customer complaints about billing rose by 101% over the past 12 months, accounting for more than three-quarters (78%) of complaints as a whole.

In recent weeks Reynolds has objected to a £10bn rescue proposal for Thames put forward by 100 institutional investors to Ofwat, which regulates water in England and Wales, saying it would place an “undue burden” on consumers.

Commenting on the annual results, Weston said: “While we have a lot more to achieve, the progress we have made in turning the company around has meant we are now performing better and are in a strong position to accelerate the delivery of the biggest upgrade of our infrastructure in 150 years.

“This upgrade will, over time, address asset resilience issues and translate into sustained improvements in the services we provide for our customers and impact on the environment.”