This article is more than 2 years old

This article is more than 2 years old

Thames Water will not pay its chief executive a bonus for the next two years and after that will link it to leak and pollution targets being met.

Britain’s biggest water company was recently fined £55m by the watchdog Ofwat and ordered to pay £65m to customers for failing to adequately tackle leaks in 2017. It has warned it will miss its leak targets again this year.

Even so, the company paid its chief executive, Steve Robertson, a £50,000 bonus last year. But it is thought that, following criticism, the firm has decided not to pay its boss a bonus for the next two years.

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Robertson, who has been running Thames since September 2016, will have his 2020 bonus linked to the company achieving its leak targets, rather than financial performance.

He is expected to be in line for performance pay of up to £3.75m in 2020 but only if Thames hits 100% of its targets, which will not be easy.

Robertson has apologised to customers and vowed to put things right. He said the firm was fixing about 1,000 leaks a week and that senior managers would only be rewarded for reducing leaks when targets were hit.

Thames is expected to announce its new bonus structure when it publishes its annual report and results on Thursday. It declined to comment on the move, which was first reported by the Evening Standard.

Ofwat will hope that other water companies will also link their bonus plans to performance on leaks and customer service.

One of the highest-paid water bosses is Liv Garfield of Severn Trent, who got a bonus of £501,000 last year, and only part of it was linked to customer goals.

She also received £706,000 from an LTIP plan, which relates to financial targets, out of an overall £2.1m pay package – down from £2.4m the previous year.

The GMB union has attacked the water bosses for banking £58m in pay and benefits over the last five years while customers have faced above-inflation rises in their water bills.

Ofwat has set all water companies a target of bringing down leakage by at least another 15% up to 2025 and expects further reductions thereafter. Thames wants to reduce leaks by 50% over the longer term, compared with 2016-17 levels.

The company also received a record environmental fine of £20.3m last year after huge leaks of untreated sewage into the Thames and its tributaries.