Pennon water boss receives bonuses despite record losses
- Pennon reported a rise in annual losses to £72.7 million due to a water contamination crisis and increased operational costs.
- Chief executive Susan Davy received a £191,000 share bonus despite public outrage over rising executive pay amid company losses.
- Pennon is considering changes to executive compensation structures after facing criticism, highlighting a need for accountability in a challenging market.
Pennon, the owner of South West Water, is facing significant financial challenges after reporting annual losses of £72.7 million for the year ending March 2025, a sharp increase from the £9.1 million losses the previous year. The company's troubles have been attributed to a crisis involving water contamination and rising customer bills. The outbreak of cryptosporidium in the Devon water supply last year led to serious health issues for residents and incurred costs of approximately £21 million, which deepened the company's financial woes. As part of the water sector, Pennon's residential bills surged 28% from April 2025, significantly affecting customers and intensifying scrutiny on the firm's practices. Despite the ongoing financial difficulties, chief executive Susan Davy was awarded nearly £200,000 in share bonuses in conjunction with a total annual pay package of £803,000. Critics, including members of parliament, have voiced concerns regarding Davy's rising pay, especially considering the company's losses. The company insisted that these bonuses were not funded by customers and added that Ms. Davy's pay decrease from £812,000 the previous year reflected a reduction in her long-term share bonuses. Furthermore, the firm announced that no annual bonus would be granted to Davy for 2024-25 until additional performance measures were established following the implementation of the Water (Special Measures) Act. Pennon is also exploring a comprehensive review of executive compensation, citing that the pay for its chief executive remains within the lower 10% among the larger FTSE 250 companies based on market capitalization. The company's board is keen to ensure that executive remuneration aligns with performance in the upcoming financial periods, particularly amid the scrutiny from customers and regulatory bodies due to the firm's recent setbacks.