Thames Water has hired a former British Gas executive as its new boss on a pay package worth up to £2.3 million to lead an overhaul as it faces mounting pressure over its financial troubles and poor performance.
Chris Weston, who worked at British Gas owner Centrica for 13 years and most recently headed up power specialist Aggreko, will become the water firm’s chief executive from January 8.
He replaces interim co-chief executives Cathryn Ross and Alastair Cochran, who were parachuted into the role when former boss Sarah Bentley stepped down in June in the middle of a funding crisis that left the debt-laden firm on the brink of emergency nationalisation.
He will land a sizeable pay package if he succeeds with turnaround efforts as Thames Water revealed he will be paid £850,000 a year, plus £117,000 in pension and benefits, and a further potential £1.3 million in performance-related bonuses.
The firm stressed that part of the bonus is deferred for two years and is directly linked to goals under its turnaround plan, adding that it has been “designed to meet Ofwat’s requirements on executive-related pay”.
“Where they are not met, we will intervene to protect customers from paying for these bonuses.”
It comes after Thames Water – the UK’s biggest water supplier with 15 million households across London and the South East – admitted in a session with MPs on Tuesday that its parent company does not have the funds to repay a £190 million loan due next spring.
The firm, which has seen its debt mountain swell to £14.7 billion, also told the Commons Environment Committee hearing it will take longer than its current three-year turnaround plan to complete a critical overhaul.
“He brings strong operational and strategic expertise as we enter this crucial period of delivering our refocused turnaround plan and providing the service that customers rightly expect of us,” he said.
Mr Weston said: “I recognise that this business is critical to both society and the UK and how important it is that we restore confidence in our operations and financial position.”
Mr Weston was chief executive of power specialist and generator supplier Aggreko for seven years until the end of 2021, before which he held a raft of leadership roles at Centrica and British Gas, latterly as managing director of international downstream.
Previous roles also include heading up telecoms firm One.Tel for two years as managing director for UK and Europe, leading its sale to Centrica, as well as a stint at Cable & Wireless.
Last week, Thames Water reported a 54% drop in pre-tax profits to £246.4 million in the six months to September 30, despite a 12% rise in revenues.
In July, the firm was handed a £750 million lifeline which included around £500 million from shareholders.
The Government was said to have be working on contingency plans for possible nationalisation of the firm if it had failed to raise the funds.
At the committee session earlier this week, the group’s bosses faced significant scrutiny over the utility company’s decision to pay a £37.5 million dividend in October despite missing pollution and leakage targets, while debt also grew.
