Chris Weston, chief executive of Thames Water, has defended a salary increase that brings his total pay package to over £1 million, amid ongoing controversy surrounding the company’s financial and operational challenges. The water utility, which serves around 16 million customers in London and the southeast of England, disclosed in its latest annual report that Weston’s basic salary rose by nearly 14 percent to £995,000 as of April. Including deferred awards and other benefits, his total remuneration exceeds £1 million.

Weston, who joined Thames Water in January 2024, stated that the pay rise was justified, emphasizing the need to attract experienced leadership to navigate the company’s difficult circumstances. “I absolutely think the pay rise is deserved,” he said, highlighting efforts to drive a business turnaround. Thames Water reported a return to profit of £113 million for the year ending in March, following a loss of £1.5 billion the previous year, partly due to a 40 percent increase in customer bills. However, the company also acknowledged it failed to meet several environmental and customer service targets, incurring £157 million in regulatory penalties.

Despite a government ban on bonuses for water company executives unless environmental goals are met, Thames Water disclosed paying Weston £99,210 in deferred awards. The company contended that these awards complied with the rules because they were granted before the bonus restrictions came into effect. Additionally, Steve Buck, the company’s chief financial officer, received a salary increase from £500,000 to £630,000.

The company’s mounting financial difficulties include debt rising to £19.5 billion, up from £17.1 billion, representing 86 percent of Thames Water’s asset value—a figure significantly higher than the industry benchmark of 60 percent set by the regulator Ofwat. Much of customer bills—approximately 27 pence of every pound—go toward servicing this debt. Thames Water is currently negotiating with creditors, regulators, and the government over a £10 billion recapitalisation and restructuring plan intended to secure new equity and improve credit ratings. These talks have been paused amid recent changes in government leadership.

The pay awards and company performance have drawn sharp criticism from government officials and opposition politicians. Environment Secretary Emma Reynolds described the pay rises and bonus payments as “outrageous,” condemning the company for rewarding executives despite poor environmental records and the ban on performance-related bonuses. Reynolds warned of further government action to prevent executives from receiving bonuses “by any other name.” Alistair Carmichael, chairman of the House of Commons Environment Committee, accused Thames Water of disregarding government directives by increasing executive pay while underperforming.

Concerns have also been raised over the role of Julian Gething, a turnaround executive seconded from consultancy Alix Partners as the chief restructuring officer. Gething received nearly £2.2 million for his first full year in the position, tasked with coordinating the company’s financial rescue efforts. Despite these efforts, the company’s recapitalisation plan faces opposition from Labour ministers, who consider the approach places an undue financial burden on consumers. There are growing calls from some Members of Parliament for the government, including prime minister-in-waiting Andy Burnham—who has advocated for greater public control of utilities—to consider special administration or nationalisation as a last resort.

Thames Water describes itself as embarking on its largest infrastructure investment in 150 years after a long period of underinvestment. Weston maintains that while operational improvements are underway, resolving the company’s financial challenges remains critical to fund ambitious investment plans through 2030.