Thames Water’s former chief executive was handed half a million pounds as the London utility faced the possibility of collapsing into nationalisation under its £14 billion debt burden.
Sarah Bentley left the company suddenly last month after under three years in the £1.6 million-a-year job. There were reports she went after being asked waive her bonus following the public outcry over sewage in rivers and leaking mains pipes.
Thames Water said the payment revealed today was compensation for share awards she may have received at her previous employer, Severn Trent, before she moved over to run Thames.
Her payoff for leaving Thames Water, which will be revealed “in due course”, is likely to be far more.
Meanwhile, rising water bills faced by hard-pressed London households helped £2.3 billion in revenue flow into Thames in the year to March 31, up 4%. But rising costs meant it swung to an £83 million loss, having made £84 million in profit a year ago.
Around 15 million billpayers across London and the southeast are helping keep the embattled and heavily indebted company afloat as it faces down calls for nationalisation. Thames revealed today that New 602 million litres of clean water leaks from its pipes every day and there were over 8,000 sewage spills in the year to March 31.
It has been at the centre of a public outcry over the amount of money it pays to service its £14 billion debt burden at a time when London’s water infrastructure is in such desperate need of modernisation.
Shareholders are also on the hook. They agreed today to put another £750 million into Thames, but industry regulators at Ofwat said last week it could need £1.5 billion. Today’s cash call eased immediate fears over Thames’ finances in the City.
Victoria Scholar at Interactive Investor said the cash injection “ reduces the likelihood of collapse”, but warned Thames “clearly still has a lot of work to be done to reduce leaks and sewage spills, reduce its debts and improve profitability.”
But the company’s executives face a grilling this week in Westminster when they appear before the Environment, Food and Rural Affairs Committee.
MPs on the panel have already warned they are likely to probe current financial regulations and legal oversight of water utilities in general and “the causes of the problems facing Thames Water” in particular.
Interim co-CEOs Cathryn Ross, who used to run Ofwat, and Alastair Cochran will be grilled alongside the Thames’ newly appointed chairman, veteran City troubleshooter Sir Adrian Montague. Executive pay is also highly likely to come up.
Thames said today it changing the way it will pay executives today, linking bonsues to the delivery of its turnaround plan. It will pay out a maximum of 240% of executive directors’ base salaries, down from 320%. The company said the change showed “remuneration restraint.”
