Boss of South West Water forgoes £440,000 bonuses
UNDER-FIRE South West Water owner Pennon has revealed its chief executive saw her pay package more than halve last year after forgoing £440,000 in bonuses as the group appointed a new chairman and pledged to overhaul pay plans for top bosses.
The group’s annual report revealed that Susan Davy’s total pay in 202223 fell 64% to £543,000 from £1.53 million the previous year, when she picked up £968,000 in bonuses and share awards.
Pennon – whose South West Water business told around 17,000 households in Devon to boil water last month after a parasite outbreak in their supply – said Ms Davy would have been entitled to £440,000 in annual bonuses and long-term performance share awards for 2022-23.
But, “having reflected on the exceptional economic backdrop”, she told the board she would forgo the payments.
She will instead put an equivalent value into the firm’s WaterShare+ scheme, which it said “directly benefits our customers by either providing money off their bill or via ownership of Pennon shares”.
The group also named one of Deloitte’s former top bosses, David Sproul, as its incoming chairman.
Mr Sproul, who was previously global deputy chief executive at Deloitte and is currently chairman of Starling Bank, will replace Gill Rider at the firm’s annual general meeting on July 24.
It comes as Pennon has faced mounting pressure over the water contamination crisis in Devon, with the group last month revealing it was paying out around £3.5 million in compensation to affected customers.
Thousands of households and businesses in the Brixham area have been told to boil their drinking water since May 15 after cryptosporidium – a waterborne disease which can cause unpleasant symptoms such as diarrhoea and vomiting – was found in the water supply.
Pennon’s report showed that Ms Davy saw her annual salary rise by 3.5% in April to £491,625, although the firm said she declined pay increases in 2021 and 2022. The group courted further controversy after revealing in May that it increased its full-year dividend payout to investors by 3.8%, despite reducing it by £2.4 million after it was handed a record fine for sewage spills.
Pennon said in its annual report that it was changing its annual bonus scheme for top bosses in 2023-24 to ensure payouts are linked more heavily to its performance for customers and the environment, now accounting for 60% of the award.
It also vowed to overhaul future plans in view of the “external environment” and said it would look to talk to investors and stakeholders.
“Following the AGM, we intend to undertake a review of our pay structure taking account of our strategic priorities and continuing best practice guidance,” Pennon said.
Pennon’s annual results last month showed that underlying operating profits lifted 8.6% to £166.3 million in the year to March 31.
On a statutory basis, pre-tax losses widened to £9.1 million for the year to March 31 from £8.5 million the previous year as it faced a jump in debt costs. The group, which also owns Bristol Water and recently bought SES Water, saw its debt pile swell to £3.5 billion as of the end of March, up from £3 billion a year earlier.