Pennon CEO Susan Davy Forgoes Bonuses Amid Water Crisis, Pay Halved
Under-fire South West Water owner Pennon has revealed that its chief executive, Susan Davy, saw her pay package more than halve last year after forgoing bonuses. The move comes as the group appointed a new chairman and pledged to overhaul pay plans for top executives.
According to the group’s annual report, Davy’s total pay in 2023-24 fell 64% to £543,000 from £1.53 million the previous year. This significant reduction was due to her decision to forgo her entitled annual bonus and long-term performance share awards, reflecting on the "exceptional economic backdrop."
Instead of receiving the bonuses, Davy opted to put an equivalent value into the firm’s WaterShare+ scheme, which benefits customers by providing money off their bills or offering ownership of Pennon shares.
The announcement comes as Pennon faces increasing pressure over a water contamination crisis in Devon. Last month, around 17,000 households in the Brixham area were told to boil their drinking water after cryptosporidium, a parasite causing symptoms like diarrhea and vomiting, was found in the water supply. The group has committed to paying approximately £3.5 million in compensation to affected customers.
Additionally, Pennon has named David Sproul, a former top boss at Deloitte, as its incoming chairman. He will replace Gill Rider at the firm’s annual general meeting on July 24.
The annual report also disclosed that Davy’s annual salary rose by 3.5% in April to £491,625. However, she had declined pay increases in 2021 and 2022.
Pennon faced further controversy in May when it revealed an increased full-year dividend payout to investors, despite reducing the payout by £2.4 million after receiving a record fine for sewage spills. In response, Pennon stated that it is changing its annual bonus scheme for top executives in 2023-24, ensuring that 60% of payouts are linked to performance for customers and the environment.
The group also vowed to overhaul future pay plans considering the “external environment” and to engage with 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.
The company’s recent actions reflect a shift towards more customer-centric and environmentally responsible governance, amidst ongoing scrutiny and challenges.