Outrage over huge payout at Pennon

One of the UK’s largest water companies – which has been fined for discharging wastewater into rivers and the sea – has handed over millions of pounds to its investors.

Water giant Pennon increased its dividend for the year by 10 per cent to £111.7m. Last year it also paid a special dividend of £1.5 billion.

It comes despite one of its subsidiaries, South West Water, being fined £2.15 million in April for illegally dumping waste water into rivers and the sea around Devon and Cornwall.

Politicians have called on the company to come clean before paying shareholders.

Liberal Democrat environmental spokesman Tim Farron said it was “a slap in the face” to communities across the Southwest facing bans on water hoses and sewage dumping.

He added: ‘The system is broken when their executives and shareholders are rewarded with millions of pounds for destroying the environment.’

Last month, The Mail on Sunday revealed that two of the UK’s largest water companies, Seven Trent and United Utilities, would be making massive payouts to shareholders.

Severn Trent increased his annual payout from £255 million in 2022 to £261 million. United Utilities decided to pay shareholders more than £300 million last year despite being England’s most polluting water company last year.

Pennon has pledged to clean up his act, saying that “usage of the storm overflow” – where raw sewage is discharged into the sea – will drop by 30 percent by 2022.

It reported a pre-tax loss of £8.5m for the year to March, down from a profit of £128m in 2022 as operating expenses rose nearly 27 per cent to £517m.

It blames higher inflation and ‘unprecedented summer weather’ last year, when the UK experienced one of its hottest and driest years on record, resulting in drought and bushfires.

“This has been an extraordinary year for Pennon in which extreme weather patterns have tested our operational resilience,” said CEO Susan Davy. Last month Ms Davy decided to waive her £450,000 bonus amid growing public anger over the dumping of sewage, joining Thames Water chief executive Sarah Bentley and Yorkshire Water’s Nicola Shaw.

The water regulator, Ofwat, also opened an investigation into South West Water last week about whether it was correctly reporting leaks and the amount of water used by customers. If found to have reported the wrong figures, it could be fined as much as 10 per cent of its annual revenue, which amounted to £701.3 million for South West Water this year. Activists were also unimpressed by Pennon’s payments to investors and called on regulators to take further action against the industry.

“We are requiring Ofwat to limit and regulate CEO bonuses so that dividends and bonuses are only paid if environmental compliance is met and the water company’s performance improves,” said Henry Swithinbank, policy manager for Surfers Against Sewage.

“No one should be rewarded for destroying the environment.”

• The boss of UK gas owner Centrica is facing a revolt over his multi-million pound pay package. Fund manager Abrdn plans to vote against the executive pay report at this month’s AGM after profits soared amid a rise in household utility bills. Chief executive Chris O’Shea was paid £4.5 million last year despite anger over a windfall profit and an investigation that found British Gas collection agencies broke into customers’ homes under warrant to force prepayment meters.