Thames Water pauses £2.5m of bonus payouts

(Sharecast News) - Thames Water has deferred nearly £2.5m in payouts to executives, it was reported on Tuesday, as the stricken utility looks to avoid a political backlash. According to Sky News and The Guardian, the embattled utility - which is seeking approval for a multi-billion pound rescue deal - was due to pay a total of £2.46m in retention awards to 21 top executives this month. The first tranche, also for £2.46m, was paid in April, but attracted fierce criticism from politicians on the environment, food and rural affairs (Efra) select committee.

Thames Water has argued that the payments are essential, as they need to retain staff and battle low morale. However, it has now decided to pause the next tranche until further notice.

According to Sky, the decision was taken following deliberations among directors. Both the government and Ofwat, the regulator, have been notified about the decision.

Thames Water, which is trying to stave off nationalisation, is seeking approval for a rescue deal.

Under the terms of the deal, creditors would inject around £5bn into the debt-laden business, which has long been criticised for its dire performance, including sewage spills and leaks. The creditors would also write off billions of pounds in debt.

In return, Thames Water is demanding greater leniency from regulators over fines and targets.

Alistair Carmichael, chair of the Efra committee, told The Guardian: "It's important that the focus of Thames management is on turning around the company and not on rewarding staff and having to handle negative headlines.

"The public is rightly furious at the prospect of senior staff in a company with the performance record of Thames receiving bonuses.

"We will continue to monitor this situation."

Thames Water has yet to comment on the reports.