Thames Water contracts under fire: Groans as shareholders told management was 'underpaid' before recent rises

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The Independent Online
THAMES WATER was forced to defend its controversial policy of three-year rolling contracts for directors at a hostile shareholders' annual meeting yesterday.

It was one of several issues on which the board faced a barrage of criticism, leading the chairman, Sir Robert Clarke, to tell one shareholder he was out of order.

Resolutions seeking the re-election of three directors including the finance director, David Luffrum, were carried, but not before small shareholders had their say.

PosTel, the fund management company, is thought to have voted against Mr Luffrum. Alastair Ross Goobey, PosTel's chief executive, would not confirm this, but simply repeated the firm's policy of opposition to rolling contracts of more than two years. Sir Robert said three-year contracts were needed to attract the right people.

Directors' pay was also attacked, particularly the 43 per cent rise for Mike Hoffman, chief executive, whose total remuneration last year was pounds 393,000.

Sir Christopher Leaver, chairman of the remuneration committee, said management had been 'underpaid' before last year's pay rises, producing groans and jeers from the 1,000-strong audience.

When one shareholder questioned financial details in the accounts, the chairman's smiling facade cracked. 'We resent your comments. You are out of order, sir,' he boomed.

Shareholders at South West Water's annual meeting complained bitterly about annual water bills - at pounds 304 the highest in England and Wales.

Bill Fraser, managing director, revealed that the firm had held discussions with government ministers to seek an increase in benefits and pensions paid in the region to help cover the cost of water bills. South West had also proposed using council tax bands as a fairer way to work out bills, which are based on the old rating system.

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