Committee publication · Correspondence · 9 June 2025
Correspondence from Sir Adrian Montague, Chair, Thames Water, in response to evidence before the Committee and our letter of 23 May, dated 30 May 2025
From: Environment, Food and Rural Affairs Committee
Inquiry: Reforming the water sector
Summary
Sir Adrian Montague, Thames Water Chair, clarifies his Committee testimony from 13 May 2025, explicitly confirming he misspoke on the Management Retention Plan rather than equivocating with 'may have misspoken'. He provides detailed justification for the £18.5m retention scheme covering 21 senior staff (excluding executives and himself), funded from £3bn super-senior liquidity, with payments paused pending acquisition discussions with KKR.
Key findings
- Montague confirms he definitively misspoke on the MRP, not equivocating as the Committee interpreted; the 'may' was stylistic rather than substantive evasion.
- MRP requirement originated from shared understanding with lenders rather than lender insistence; designed to ensure management stability during recapitalisation and turnaround.
- £18.5m total retention payments across 21 senior managers (not Board executives or Montague himself) funded from £3bn super-senior funding; CEO Chris Weston declined participation.
- Payment structure: 50% base salary April 2025, 50% on second restructuring plan/December 2025, 200% final in June 2026; first tranche paid, future payments paused pending KKR acquisition outcome.
- Remuneration Committee benchmarked scheme against other restructurings and consulted A creditors' advisors; awaiting Regulator guidance on Special Measures Act implementation.
Tone
ProceduralTopics
Key actors
Sir Adrian Montague, Chris Weston, Helena Dollimore MP, Alistair Carmichael MP, Thames Water Utilities Limited, KKR, The Guardian
Notable line
“For complete clarity, I did misspeak. However, I certainly did not intend to mislead.”
Key Quotes
“The use of "may" was not intended to equivocate or to obfuscate. It was simply my attempt to take the sting out of a disagreeable admission.”
“For complete clarity, I did misspeak. However, I certainly did not intend to mislead.”
“… it was not 'insisted' upon by the lenders, as I said in the Committee. However, it came about as a result of a shared understanding that the stability of the senior management team is of absolute importance”
“The recipients of the retention payments are a number of senior members of the management team: 21 in total who we believe are integral to this crucial next phase of the business.”
“The plan amounts to £18.5m in total, spread across the three separate payments over two years and shared between the 21 individuals, assuming a successful restructuring process.”
“I can confirm that future payments have been paused. The Committee is aware that Thames is considering KKR as its preferred partner for a potential acquisition”
Source · parliament.uk record ↗