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Co-op Group boss Richard Pennycook asks for big pay cut | |
(35 minutes later) | |
The head of the Co-operative Group has asked for a 40% cut to his base salary because the job has become easier. | |
Chief executive Richard Pennycook says the business is now back "in calmer waters" and the reduction reflects the revised demands of the current job. | Chief executive Richard Pennycook says the business is now back "in calmer waters" and the reduction reflects the revised demands of the current job. |
He told the BBC the pay cut was "by no means the main news", which was the Co-op's recovery, for which he credited his 70,000 staff's "dedication". | He told the BBC the pay cut was "by no means the main news", which was the Co-op's recovery, for which he credited his 70,000 staff's "dedication". |
His base salary will fall from £1,250,000 to £750,000. | His base salary will fall from £1,250,000 to £750,000. |
The pay cut extends to 60% once his bonus payments are factored in. | |
Mr Pennycook was finance director of the group, but took over as chief executive in 2014 when the former boss, Euan Sutherland, resigned after 10 months in the job. | Mr Pennycook was finance director of the group, but took over as chief executive in 2014 when the former boss, Euan Sutherland, resigned after 10 months in the job. |
His total pay package - including salary and bonuses - was reported to be £3m. | |
The Co-op is undergoing a three-year plan to steady the business after deep problems emerged in 2013 with its bank, which it has since largely sold off. | |
Food and funerals | |
The news on Mr Pennycook's pay came as the Co-operative Group - which includes 2,800 food stores, 1,000 funeral homes and financial services - reported its financial results for 2015. | |
Profit was £23m for the year, down from £124m last year, when the figure was boosted by a one-off gain of £121m from selling parts of its business. | Profit was £23m for the year, down from £124m last year, when the figure was boosted by a one-off gain of £121m from selling parts of its business. |
Underlying profit before tax was £81m, up from £73m last year. | |
The Co-op said it had made progress, with sales at both its food and funeral home businesses growing. | |
Sales in its 2,800 food stores grew 1.6%, to give a £250m profit. | Sales in its 2,800 food stores grew 1.6%, to give a £250m profit. |
The Co-op said its convenience stores were outperforming the UK grocery market, because people's shopping habits were changing as they made more frequent trips to buy food. | The Co-op said its convenience stores were outperforming the UK grocery market, because people's shopping habits were changing as they made more frequent trips to buy food. |
Earlier this week, grocery research firm Kantar reported that the Co-op's sales had risen at their fastest rate since it bought rival Somerfield in 2011, climbing by 3.9%. | Earlier this week, grocery research firm Kantar reported that the Co-op's sales had risen at their fastest rate since it bought rival Somerfield in 2011, climbing by 3.9%. |
At its funeral homes business, which is the largest chain in the country, profits were £78m and sales rose by 9.9%. | |
It plans to open another 200 funeral homes in the next three years, which will increase the size of its estate to more than 1,100 homes. | It plans to open another 200 funeral homes in the next three years, which will increase the size of its estate to more than 1,100 homes. |
Review | |
In 2013, the Co-op was rocked by the discovery of a £1.5bn hole in the Co-op Bank's finances. | |
The bank was rescued by a group of investors and the Co-op Group now owns a 20% stake in the bank. | |
Last week, the Co-op Bank reported that its annual pre-tax losses had more than doubled to £610m, from £264m in 2014. | |
The problems at the Co-op Group led to a review of the business by Lord Myners. This led to the number of board members being cut drastically, while directors now need to have qualifications suited to running the business. |