United Kingdom

£2m golden goodbye for sacked boss of Thames Water

Britain's biggest water company has handed its former boss a £2million pay-off after he was fired for a series of failings.

Thames Water has been accused of rewarding failure over the golden handshake for Steve Robertson.

Robertson presided over numerous major leaks, hefty fines and sewage flooding controversies during three years in charge.

Former Thames Water chief executive Steve Robertson was fired after a series of failings

Ofwat, the industry watchdog, repeatedly attacked the company for failing to tackle costly leaks and reduce customers' bills.

Yet Robertson, who left with immediate effect in May last year, still received a huge severance package, The Mail on Sunday can reveal.

Thames Water, which has 15million customers across London and the Thames Valley area, gave Robertson a £2million pay-off on top of the £777,500 he received to cover his 12-month notice period.

Critics last night hit out at the golden handshake and said it would hamper efforts to protect the water industry from the threat of nationalisation.

Ed Davey, the acting leader of the Liberal Democrats, said: 'This payout is yet another example of rewarding failure. Without proper regulation these companies will continue to pat themselves on the back.'

Luke Hildyard, director of the High Pay Centre think-tank, said: 'When people see executives extracting such obscene rewards for doing a poor job of overseeing what is essentially a public good, it is understandable that they conclude that privatisation of utilities has been for the benefit of the business leaders that lobby for it rather than the consumers who pay for it.'

Jeremy Corbyn's Labour vowed to bring water companies and other energy firms back into public ownership before losing December's General Election.

Jeremy Corbyn's Labour vowed to bring water companies and other energy firms back into public ownership before losing December's General Election

The water industry, which was privatised by Margaret Thatcher in 1989, has come under pressure over fat-cat pay and dividend bonanzas for shareholders – often overseas investors – as bills remain high.

Thames Water is owned by a string of overseas owners including sovereign wealth funds from Kuwait, China and Abu Dhabi, as well as others such as the BT pension scheme. And after criticism of its complex offshore structure, Thames Water closed its Cayman Islands subsidiaries.

Thames Water is notorious, even by the industry's standards. In 2018, in an effort to repair its reputation, the company promised not to pay any dividends to its shareholders for at least four years and invest in its ageing infrastructure to prevent leaks.

The same year, Ofwat ordered Thames Water to repay £120million to customers for its failure to tackle leaks.

Then in 2019, it was revealed that in Robertson's final year in charge, Thames Water still lost an average of 690million litres (151million gallons) a day through leaks – meaning that a quarter of its water supplies never reached customers' homes and businesses.

In 2017, Thames Water was also fined a record £20m for huge sewage leaks into the Thames

The company, which made £2.2billion in revenue and £434million in pre-tax profits last year, hit its leak target for the first time in four years in the year ended March 2020.

In 2017, Thames Water was also fined a record £20million for huge sewage leaks into the Thames – one of several regulatory penalties the firm was slapped with under Robertson's watch.

After his firing, Ian Marchant, former boss of energy giant SSE, took over as interim executive chairman as the water company searched for a successor. 

In April this year, 11 months after Robertson's abrupt departure, Thames Water unveiled Severn Trent executive Sarah Bentley as its new chief, starting in September. And eyebrows were raised after it emerged she could make as much as £12.6million in three years, including a £3.1million 'golden hello' to compensate for the loss of bonuses at Severn Trent.

Yesterday, Davey said: 'As bills climb yearly, so do executive pay packets, seemingly without being linked to performance.

'Liberal Democrats call for this Government to end this 'something for nothing' culture by giving regulators the powers to take these companies to task.'

Commenting on the £2million pay-off, a Thames Water spokesman said: 'Our customers will not pay for this. While with us, Steve Robertson received no bonus for two years as we prioritised investment in improving service for customers.

'His payment for loss of office, which was calculated with his incentives and performance in mind, was funded through earnings generated outside the regulated business. The money would otherwise have been due to our shareholders.'

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