Thames Water’s £1m signing-on fee paid to its finance chief last month was drawn from emergency funding provided by the company’s lenders, as the utility teeters on the edge of temporary nationalisation under roughly £20bn of debt.
Steve Buck joined Thames Water in April 2025 as chief financial officer, but the payment was deferred and not made until July, after the company had taken legal advice over its contractual obligations. The fee was first reported by Sky News and subsequently confirmed via a letter from Thames Water chairman Sir Adrian Montague to MPs on the House of Commons Environment, Food and Rural Affairs (EFRA) Committee.
What Buck was actually paid, and why the signing-on fee went unreported
The Thames Water signing-on fee sits on top of pay Buck had already received. According to The Guardian, he received total pay of £591,000 for the financial year to 31 March, comprising a £491,000 base salary and a £25,000 discretionary payment to ‘support his appointment and facilitate his timely onboarding, recognising costs incurred in connection with his recruitment’. The £1m payment was not detailed in Thames Water’s annual report, released last month.
Buck came to Thames Water from Pennon Group, owner of South West Water, having previously worked at Anglian Water. His contractual rights ultimately dictated he be paid the full sum, even though the payment had been agreed to be deferred when he first joined.
Thames Water also has retention payments agreed with 14 other executives, though two of those individuals have since left the company, and others are for smaller amounts than originally agreed or on more favourable terms, Yahoo Finance reports.
Political anger and the case against executive pay at a failing utility
Lib Dem MP Alistair Carmichael, chair of the EFRA Committee, was blunt. ‘Money should be going into improving services, not remunerating already well-paid senior executives,’ he told the BBC.
It is hard to argue with the underlying frustration. River Action’s head of campaigns, Amy Fairman, points out that 571 million litres of water are lost by Thames Water every day, and that over a quarter of customer bills goes to servicing debt rather than improving infrastructure.
Chief executive Chris Weston’s pay rose 14% to £1.63m in the past year, while other directors collected bonuses totalling £4.1m. Weston has defended the pay levels, arguing that the company needs ‘capable people to help turn this company around’ and that refusing to pay market rates would cost it the talent it needs. My read is that this argument carries some weight in theory, and collapses entirely when the company funding those market rates is emergency lending drawn from creditors, not genuine operating income.
Under rules introduced last year, water companies that fail to meet key performance standards automatically lose the right to award certain bonuses. Thames Water’s record does not make the signing-on fee easier to defend in that context.
Ofwat handed Thames Water a record fine of £122.7m following two investigations, of which £104.5m falls on the company and its shareholders. The regulator found that three quarters of Thames Water’s storm overflows were ‘spilling routinely and not in exceptional circumstances.’ Thames Water called some of its own improvement targets ‘not realistic.’
The company faces a binary outcome: a restructuring deal backed by its lenders, or a special administration regime, the form of temporary nationalisation intended to keep the business running while a viable solution is found. A spokesperson for London and Valley Water, a collection of the largest creditors, said the group was ‘confident that our plan is by far the fastest route to improve outcomes for customers and the environment, without any government funding or any cost to taxpayers.’ Prime Minister Andy Burnham has previously expressed a desire for ‘greater public control’ of water utilities, which suggests the government has not entirely closed the door on a harder intervention.
The restructuring deadline is the number to watch. If creditors and the government cannot agree terms, special administration becomes the default, and the question of who ultimately bears the cost of £20bn in debt, plus executive pay drawn from emergency funds, lands squarely with the public.
