Pennon chairman forced to resign weeks after Devon water pollution scandal and dividend outcry
The Pennon Group, owner of South West Water, today announced the resignation of its chief executive, just weeks after a wave of public outrage over contaminated tap water in Devon.
Gill Rider will step down after the company’s AGM after holding the position for around four years. The company announced a £127 million dividend payout just days after dozens of people fell ill in Brixham.
A parasite that causes diarrhea and vomiting – Cryptosporidium – has been found in the water supply of the picturesque coastal town of around 17,000 people. The tiny organism is found in human excrement and sewage. There is no medicine to treat the disease it causes.
The move to recommend the dividend sparked outrage and led to calls from local and Westminster politicians to scrap the dividend.
Pennon is paying around £3.5 million in compensation to affected households after people were asked to boil water before drinking it. Each will receive around £215.
This is because large parts of the industry are demanding higher bills to finance much-needed investment in infrastructure after some firms have long underinvested.
The financial viability of the industry’s biggest name and London’s supplier – Thames Water – is in question as the company is suffering from a huge debt burden and is at risk of nationalisation if its existing lenders do not help it refinance.
Pennon is listed on the FTSE 250 and also owns Bristol Water and Bournemouth Water. In 2023, the company was fined £2.2 million for discharging wastewater into waterways and the sea. The company’s market value is around £1.7 billion.
The scandal-hit company today announced that the pay of its chief executive, Susan Davy, had risen by almost 60%. A £298,000 share bonus took her total pay in 2023-24 to £860,000 from £543,000 last year. It would have been even more had Davy not given up an annual bonus of £237,000 in cash and shares.
In the same year, the number of pollution incidents at South West Water increased by 194, an increase of 80%.
South West Water serves almost 2 million customers in the West of England, including Somerset, Dorset and the Isles of Scilly, as well as Devon and Cornwall.
Rider will be replaced by David Sproul, who will join the board as a non-executive director early next month. He is also chairman of Starling Bank and an adviser to private equity firm Bridgepoint Europe.
He described it as “a turning point in Pennon’s strategy”, adding: “Never has it been more important to make a positive contribution to the sector and society. What Pennon does for customers, communities and the environment really matters.”
He, like Rider, will receive £250,000 a year. She said: “It has been an honour to have worked with such a talented board at Pennon over many years… I am delighted that David is joining the group and succeeding me as chairman. I wish him, Pennon and especially all our dedicated colleagues every success for the future.”
Pennon shares lost almost 5 pence to 591 pence, their lowest level since September last year.
