Thames Water boss to forgo bonus to address 'unacceptable standards of service'

Bosses at a water firm have said they will forgo all performance-related pay and address its "unacceptable standards of service".

Last year, Sarah Bentley, the CEO of Thames Water, received £496,000 in performance-related bonuses.

This year she will decline her bonus and Long Term Incentive Plan (LTIP) payments along with CFO, Alastair Cochran - while the company makes efforts to improve the health of rivers.

LTIP payments involve share-based awards for senior employees with a vesting period of at least three years.

Thames Water is in the second year of an eight-year turnaround plan to address ageing and deteriorating infrastructure, a legacy of under-investment and poor performance.

Ms Bentley said: "We are a relatively new team executing an eight-year turnaround plan to transform Thames Water and we have taken some important steps forward this year.

"I am proud of the work my team is doing in starting to address the poor state of our asset base and unacceptable standards of service for our customers.

"Nevertheless, the turnaround plan is not yet where I want it to be primarily due to significant headwinds from extraordinary energy costs, coupled with two severe weather events.

"These have hit our customer and environmental performance. Against this backdrop, it simply doesn't feel right to take my bonus this year."

In the last 12 months, Thames Water has launched a £1.6bn programme to modernise sewage infrastructure and improve river health; relocating the customer call centre, bringing it back from South Africa to Swindon creating 200 jobs; and expanding the leaks repair team to more than 1000 engineers, enabling them to fix a leak every 7.5 minutes.

Ms Bentley's and Mr Cochran's decisions come at a time when Thames Water's Remuneration Committee is working on a new performance-related pay structure.

It will be published later this year and will better align executive compensation with the priorities of customers and regulators by giving greater weighting to customer service and environmental performance than financial results.

Ms Bentley concluded: "At a time when customers and regulators are properly focused on the environmental and service performance of water companies, it is right that England's biggest water company leads the way in setting a remuneration structure which focuses management on tackling the most pressing challenges: improving customer service, reducing leaks and focusing on the health of our rivers."

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