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Co-op executives to receive pay hike despite £2bn losses

The Co-operative Group has announced it will award bumper pay rises to senior staff over the next two years, despite the near collapse of its banking arm.

According to a report in The Observer, new chief executive Euan Sutherland is set to receive total compensation of £3.66m this year, with a basic salary of £1.5m, despite conceding last month that 2013 had been one of the worst in the lender’s history.

Chief operating officer Richard Pennycook will be awarded £1.8m in total, while 12 senior executives will also receive significant pay increases.

According to The Observer, the Co-op will pay more than £24m over two years to just eight executives, compared with total compensation for 13 top executives last year amounting to just £6m.

The group is also set to announce losses exceeding £2bn for 2013, after discovering a £1.5bn black hole in its banking division.

This follows the arrest of former Co-op chairman Reverend Paul Flowers on drugs allegations after he was filmed buying crystal meth and crack cocaine last year.

The Labour Party, which shares close ties with the Co-operative Group, has labelled the decision to award the pay rises as ‘disappointing’.

On Sunday, shadow chief secretary to the Treasury Chris Leslie MP said: “I think this is very disappointing. I believe in mutuality, I believe in the co-operative principle but I happen to think that Co-op should be acting differently.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. This is frankly hysterical. How on earth can this be called a Co-operative? I cannot imagine that any informed customer would stay with them. Surely this Bank will not endure this complete PR disaster. George Orwell would be having a field day with many of the characters at Co-op who could be easily worked into Animal Farm. What an utter mess. Time for a trip to the butcher in preparation for a summer BBQ.

  2. Some years ago I recall the BBC made a programme which looks at the economic future of the U.K. In this program gave you the impression of a rich and political elites living in gated communities. While the rest of the population especially the young were living on the bread line in poverty and deprivation.
    When you read comments like the ones above you have to start asking yourself has process already started. But as ever and to the area when businessmen rewarded themselves to taking the risk. Today it seems to be the other way round in which the executives take all the rewards and the shareholders, and cooperative members seemed to take all the risks.
    Without the help of the hedge funds and the private equity managers the Co-op would have been a basket case. However, one has to question the decision and rewarding they accept it is these extremely high salaries. Surely articles like this will do nothing to help the east this ethos and value the co-operative bank once stood for.

  3. Personally I am astounded that any-one is surprised by this ? especially form the Labour camp !

    This merry-go-round of greed and self gratification has been going on for years, banks, regulator, auditors and politicians alike.

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