May 19, 2011
I’m writing because my family and I were affected by the economic collapse of 2008, and we don’t want it to happen again.
We live in an area that was experiencing tremendous growth during the housing boom. Pennsylvania American Water Company, our provider of water and sewage services, made investments totaling over 8 million dollars in its sewage treatment facilities, anticipating that the growth would continue. After the housing market collapsed, they realized that their investment was not-so-good! However, PAW continued to generate a profit and pay dividends to its' shareholders.
As a consumer, we have seen our basic charge for sewage services go from $5.00 per month in 2007 to $40.42 per month in 2011, an increase of 808%. The executive compensation at Pennsylvania American is not publicly available, but I can tell you that their net profit in 2010 was $267.83 million and they paid $150.3 million in dividends to their shareholders.
Pennsylvania American Water made a bad investment. Rather than taking responsibility for the results by reducing executive compensation or shareholder dividends, they are making their customers bare the burden of their mistake. Investors take on risk when purchasing stock in a company, so why should the customers suffer the consequences?
Thank you for considering my comment,
Paula Rucker