Co-op boss takes 60 percent pay cut
The boss of the Co-operative Group has agreed a 60 percent pay cut, meaning his basic salary will fall from £1.25 million to £750,000 and other incentives have been reduced.
Allan Leighton, the Co-op’s Non-Executive Chair, commented: "The move by Richard to reduce his pay shows the Co-op difference in action, as we champion a better way to do business for our members and their communities.”
The news has been welcomed by Simon Walker, Director General of the Institute of Directors, who said: "The Co-operative Group has had a very difficult couple of years, culminating in a radical restructuring of the business. During this time Mr Pennycook has had to work hard to get the Co-op back on track. His pay reflected this additional work. Now this his finished, he has taken it upon himself to ensure that his salary reflects the work that will be required of him going forward. This is refreshing and should be seen as a lesson for other businesses.
"The IoD has said repeatedly that a CEO's pay should be transparent and linked to performance. The proactive steps taken today by Mr Pennycook and the Co-op's board should be a wake-up call to other companies. Being open, honest and transparent about the salaries of senior executives can go a long way to restoring public trust in British businesses.
"It remains the case that, for shareholders, the salaries of some CEOs seem unjustified. As we enter AGM season, I hope that today's news acts as an example for boards to reflect on the level of CEO pay, and that steps are taken to adjust salaries and bonuses when performance disappoints, or the role, scope or responsibilities of the job change. This isn’t just good corporate governance, it also makes good business sense."
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