Thus \u2013 surprise, surprise \u2013 salary increases, allowance awards and, most of all, retention payments have proliferated. After the English and Welsh companies published their annual reports last month, this newspaper found<\/a> that overall reported pay packets rose by 1.5% to \u00a325.3m for chief executives and chief financial officers for the year. It was the second year in a row<\/a> that a bonus ban had resulted in higher overall pay across the sector.<\/p>\n One can usually rely on Thames Water<\/a> to muddy things further, and its post-annual report contribution was the news that the chief financial officer, Steve Buck, who was paid \u00a3591,000 in the financial year to March, got a delayed \u00a31m signing fee<\/a> at the end of July. As for retention payments for other executives that were \u201cpaused\u201d after a political kerfuffle a year ago, the company has \u201centered into 14 agreements\u201d to \u201cresolve its liability for any potential claims\u201d.<\/p>\n The government is shocked, or pretends to be. \u201cIt is unacceptable that one of the worst-performing water companies is handing out huge payments to its executives when it should be focusing on improving performance and rebuilding public trust,\u201d a spokesperson for the environment department said.<\/p>\n Again, though, one must ask: what did ministers think would happen? It\u2019s easy to agree that executives of underperforming monopolies are grossly overpaid but it was fantastically naive on the part of politicians to think a ban on bonuses would not result in alternative wheezes. It was predictable<\/a>.<\/p>\n Water companies in general have deployed the retention manoeuvre in less-than-transparent \u2013 or just shameless \u2013 ways, it should be added. Helen Campbell, the interim executive director of Ofwat, was clearly correct last month when she complained<\/a> that customers\u2019 trust is harmed when remuneration committees make decisions that \u201cgive the appearance of circumventing the rule\u201d or aren\u2019t explained.<\/p>\n The point, though, is that the government left the door wide open to such behaviour. If ministers were relying on remuneration committees to obey the \u201cspirit\u201d of their reforms, they were born yesterday. Restricting bonuses is not the same as restricting overall pay. And Ofwat can use only the powers it was given by parliament.<\/p>\n
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