Pennon water boss lands nearly £200,000 in share bonuses despite losses
The water firm revealed that chief executive Susan Davy was handed £191,000 in long-term share awards, with a total annual pay package of £803,000.
The boss of South West Water owner Pennon has picked up a near-£200,000 share bonus despite the firm racking up losses after a water contamination crisis and amid painful bill hikes.
The water firm’s annual report revealed that chief executive Susan Davy was handed £191,000 in long-term share awards, with a total annual pay package of £803,000.
She had already faced criticism from MPs when she revealed in February that her pay had risen to £511,000 in 2024-25, from £492,000 the previous year in the wake of a parasite outbreak in Devon and rising cases of sewage spills.
Pennon, which also owns supplier SES Water, recently reported losses widening to £72.7 million for the year to the end of March from £9.1 million losses the previous year.
Last year’s incident in Brixham, south Devon, cost it about £21 million and pushed it deeper into an annual loss.
An outbreak of cryptosporidium – a parasite that causes infection – in the water supply left some people in hospital, while more than 100 others reported symptoms including diarrhoea.
Pennon also hit customers with eye-watering bill hikes in April as part of sector-wide increases.
Bills for South West Water customers surged by 28% on average from April, while bills for Bristol Water and Sutton and East Surrey (SES) customers rose by 5% and 3% respectively.
In its annual report, Pennon said the share bonus was paid in relation to the 2022 long-term scheme and insisted it was “not paid for by customers”.
The shares will also be subject to a two-year holding period and therefore not released until 2027.
“Overall, the committee concluded that the outcomes represented a fair reflection of performance over the period,” it said.
Pennon added in the report that the share award was “deemed to be proportionate”, adding that issues such as the Brixham water incident “had already been recognised in the forgoing of annual bonuses in 2023/24”.
Ms Davy’s saw her overall pay edge down from £812,000 in 2023-24 as her long-term share bonus was lower than the £250,000 awarded in the previous year.
The group also said it had decided not to give Ms Davy an annual bonus for 2024-25 until there was further clarity following the Water (Special Measures) Act and “the additional performance criteria that need to be achieved before a bonus can be paid”.
Pennon said it was currently looking into overhauling pay for top bosses and consulting on the matter.
The group said: “Despite being amongst the largest FTSE 250 companies when ranked by market capitalisation… pay for the chief executive is around the bottom 10% of the group.
“This is not a credible or sustainable position.
“The misalignment of CEO pay became very apparent when we were recruiting the chief financial officer, as many credible external candidates had pay expectations that exceeded the pay levels for our chief executive.”