Co-op Chief Asks For Pay Slice As Rescue Ends

Source:   —  April 07, 2016, at 0:51 AM

Richard Pennycook has requested that his total pay for two thousand sixteen should be slice by more than half, Sky News can reveal.

Co-op Chief Asks For Pay Slice As Rescue Ends

The chief executive of the Co-operative Grouping has asked fellow board members to slash his pay package‎ as a rescue programme for the mutual moves into an outright recovery phase.

Sky News has learnt that Richard Pennycook, who was installed as the Co-op'south chief executive during the biggest crisis in its history in two thousand-fourteenth‎, has requested that his basic salary be slice by more than one-third from the current £1.25m.

He's also asked for his total compensation‎ to be reduced by over fifty%, according to people familiar with the plan.

Mister Pennycook is said to have told colleagues that the pay slice was "the right thing to do for the business", according to one source who said it reflected the market positioning of the organisation and the fact that he was presently doing "a significantly different job" to two years ago.

His request will be disclosed alongside the Co-op'south annual results on Thursday.

Another source said, however, that it risked being perceived as a "public relations exercise"‎ at a time when Co-op members are continuing to forego the traditional annual dividend because of its financial woes.

Pay also proved a flashpoint for Mister Pennycook'south predecessor, Euan Sutherland, who quit after details of his remuneration were leaked to the media.

Mister Pennycook was paid a total of £2.515m in 2014, with a base salary of £1.25m, a bonus and pension contributions.

His pay for latest year, which will be made public on Thursday, was more than £3m because of a larger annual bonus, according to an insider.

"He knows that the Co-op has changed and this is about recognising that," said an insider.

The grouping was plunged into chaos in two thousand-thirteenth by a financial meltdown at its banking arm and a governance fiasco at the wider grouping which led to the former City Minister, Lord Myners, making a series of recommendations aimed at strengthening oversight of the business.

The Co-op‎ has already passed through the eye of the storm, turning a £2.3bn loss in two thousand-thirteenth into a £216m profit a year later.

Sources said on Wednesday that the mutual would report a profit for two thousand fifteen, with its convenience food business growing ahead of the market, partly as a result of price cuts on fruit, vegetables and meat.

In latest year'south annual report, Mister Pennycook, a former Wm Morrison executive, said that renewed engagement with the Co-op'south 8m members‎ would be "key to a successful rebuild".

Executives are expected to set out details of its membership programme relaunch, ‎which will comprise an enhanced range of benefits, will be set out at the Co-op'south annual meeting later in the year.

The Co-op declined to comment on Wednesday.

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