Thames Water CEO to forgo annual bonus and LTIP payments
Tuesday 9th May 2023 15:00
Thames Water CEO Sarah Bentley
- New remuneration plan to strongly align executive incentives with customer service and environmental performance
The CEO of Thames Water, Sarah Bentley, has made the decision to forgo any bonus or LTIP payments for the financial year 2022-2023. Thames Water’s CFO, Alastair Cochran, will also decline all performance-related pay.
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.”
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.
In the last 12 months there has been significant progress in laying the foundations for improved performance. Highlights include: the launch of 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 a 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.”
Notes to Editors
- The headwinds impacting the turnaround include: rapidly rising costs of energy and chemicals due to the invasion of Ukraine; sudden increases in interest rates; the severe weather events of a long drought in the summer and a rapid freeze-thaw in December.
- Last year Ms Bentley received £496,000 and Mr Cochran received £298,000 in performance-related bonuses.
- Separately, in July 2022, Ms Bentley received the final compensation payment for shares in Severn Trent she relinquished on joining Thames Water. Mr Cochran has also received a payment to compensate for the loss of Petrofac shares.