Susan Davy, chief executive of South West Water’s parent company, Pennon Group, has come under fire after receiving a substantial £300,000 bonus, despite the company grappling with a serious parasite outbreak affecting thousands of customers.
Davy’s total compensation soared from £543,000 to £860,000 last year, according to Pennon Group’s latest report. This increase includes a long-term cash payout of £298,000, reflecting performance incentives dating back to 2021. While Davy declined an annual bonus worth £237,000 in cash and shares, the significant payout has sparked considerable backlash given the recent crisis.
In recent weeks, over 16,000 households and businesses in Brixham, Devon, were advised not to consume tap water following the detection of cryptosporidium, a parasite that can cause severe diarrhoea and vomiting. The outbreak led to two hospitalizations and hundreds of illnesses, with South West Water attributing the contamination to animal faeces entering a damaged pipe.
In response to the outbreak, Pennon Group has allocated approximately £3.5 million in compensation for the affected customers. However, the financial recompense has done little to quell public and political outrage.
Anthony Mangnall, the Tory MP for Totnes and South Devon, condemned the company’s actions, stating, “Once again, South West Water have put themselves before the people. From paying out dividends to increasing their own pay, this only goes to show they are a company out of touch with the needs and wants of the people.”
Echoing these sentiments, Gary Carter, national officer at the GMB union, remarked, “Does South West Water have any shame? This scandalous behaviour has to end.”
Luke Hildyard, director of the think tank High Pay Centre, criticized the company’s handling of the crisis, saying, “Preventing intestinal parasites from flooding the tap water of your customers feels like a quite fundamental part of the job for the chief of a water company.”
The report revealing Davy’s pay details also highlighted a troubling rise in pollution incidents at South West Water. In 2023, pollution events surged by 80% to a total of 194 incidents, further tarnishing the company’s reputation.
A spokesperson for Pennon Group attempted to address the public’s concerns, stating, “We understand the strength of feeling from our customers and the public around the issues facing the water sector. For the second year running, our chief executive, alongside other members of our executive leadership team, have therefore made the personal decision to decline the annual bonus for the previous financial year.”
Despite these reassurances, the sizable bonus awarded to Davy amid the ongoing crisis continues to fuel criticism. The incident underscores a broader issue of executive compensation in the face of operational failures, prompting calls for more stringent regulatory oversight and accountability within the water industry.
