Thames Water boss Martin Baggs awarded large bonus
Monday 11 June 2012
The boss of Thames Water has been awarded a bonus nearly equal to his annual salary after a year in which a hosepipe ban was announced and customer satisfaction "deteriorated".
Chief executive Martin Baggs was awarded an annual bonus of £418,359 for the year to March 31 on top of his £425,000 salary, according to the company's annual report.
Mr Baggs, who was appointed in March 2010, is also in line to receive hundreds of thousands of pounds worth of shares in the next four years under a long-term incentive plan.
The UK's largest water and wastewater services provider announced a hosepipe ban in March after a drought took hold across many parts of the country.
The company previously said the situation was "entirely to do with the weather", with the Thames region suffering the driest two-year period for nearly 125 years.
The period also saw its measure of customer satisfaction drop, as well as the death of two contractors in separate incidents and a rise in the number of pollution reports.
However, Thames Water delivered £1 billion of investment, reduced its leakage rates and improved its drinking water quality, while the hosepipe ban should be lifted soon.
Thames Water reported a 13% drop in underlying pre-tax profits to £182.2 million, which was driven by higher bad debts in the economic climate and higher interest costs following increased investment.
The company has pledged to spend nearly £5 billion in the five years to 2015, which in the last financial year included improvements to water pipes, sewers and other facilities including the Thames Tunnel.
Thames said it hit its sixth successive annual leakage-reduction target, beating the goal agreed by regulator Ofwat by 36 million litres.
Mr Baggs said: "It may not seem like it, but before this year's very wet spring we had had the driest two-year period on record in our region.
"This meant we had to impose a temporary use ban, or 'hosepipe' ban, to make sure we would have enough water to go round, whatever the weather.
"After many weeks of unusually wet and miserable weather the situation is now a lot less serious and we expect to be able to lift the hosepipe ban sooner rather than later. That will be a great relief for everyone."
Gary Smith, national officer of the GMB union, which represents water workers, said: "This is a classic case of reward for failure. It is an absolute outrage."
When it comes to promoting equality of the sexes, we tend to think that we’ve come a long way in the past 40 years.
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