Thames Water paid chief financial officer Steve Buck a £1 million signing-on fee at the end of July, even as the utility struggles with more than £20 billion of debt and the possibility of entering special administration. The payment was disclosed in an August 4 letter from chairman Sir Adrian Montague to MPs on the Environment, Food and Rural Affairs Committee.
Buck joined Thames Water in April 2025, but the payment was deferred as part of a management retention plan. Montague said the board approved the payment on July 31 after the retention scheme expired, using money from an emergency financing facility provided by lenders.
Thames Water Defends Payment as Necessary for Retention
In the letter to MPs, Montague acknowledged that customers who had received inadequate service could regard large payments to senior executives as unfair. However, he argued that Thames Water needs experienced managers to remain while it restructures its finances and carries out a major infrastructure programme.
The company said many senior employees were recruited to address problems they did not create and could find better-paid, less demanding roles elsewhere. Its retention scheme, introduced in April 2025, was designed to keep key executives at least until July 2026 and resulted in only two participants leaving during the period.
Buck’s payment was separate from the wider retention awards. Thames Water said he had been promised the £1 million as an incentive to join, but the company incorporated it into the retention plan instead of paying it immediately.
Buck also receives an annual salary of £500,000, a pension allowance equivalent to 12% of salary and a £12,500 annual car allowance, according to Thames Water’s original appointment announcement.
Company Faces Possible Special Administration
Thames Water is attempting to secure a private-sector rescue while warning that its available cash could run out by the end of 2026. A creditor consortium holding about £17 billion of its debt has proposed a restructuring involving new equity and debt financing alongside a substantial write-down of existing borrowings.
Failure to agree on a restructuring could result in a special administration regime, under which government-appointed administrators would temporarily take control while maintaining water and wastewater services. Montague warned that recruitment and retention problems would remain even under special administration or nationalisation.
Prime Minister Andy Burnham’s government criticised the payment, saying poorly performing water companies should concentrate on improving services and restoring public confidence. Current rules allow Ofwat to block performance-related bonuses at water companies that fail environmental, financial or customer-service standards.
Executive Pay Adds to Pressure on Thames Water
The payment comes after years of scrutiny over Thames Water’s finances, pollution record and executive compensation. Ofwat imposed penalties totalling nearly £123 million on the company in 2025 following investigations into wastewater operations and dividend payments.
Montague said Thames Water has nevertheless increased capital investment by 20%, hired 1,000 employees and reduced serious pollution incidents by 27% during its turnaround. The company says it is undertaking a £20 billion infrastructure investment programme.
The board has also reached individual agreements with 14 other participants in the discontinued retention programme after obtaining legal advice about potential employment claims. Where possible, those payments are being spread over a deferred schedule rather than paid immediately.
Featured image credits: Leo Reynolds via Flickr
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