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Co-operative Group boss asks for massive pay cut Co-op Group boss Richard Pennycook asks for big pay cut
(35 minutes later)
The chief executive of the Co-operative Group has asked for a 40% pay cut because the job has become easier. 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 pay package was reported to be £3m. His total pay package - including salary and bonuses - was reported to be £3m.
Progress 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.
In 2013, the Co-op was rocked by news that its bank had a £1.5bn hole in its capital. That was rescued by a group of investors and the Group retains a small stake in the bank. Food and funerals
The Co-operative Group, which comprises 2,800 food stores, 1,000 funeral homes and financial services, said it had made progress this year, with sales at both its food and funeral home businesses growing. 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.
At its funeral homes, which is the largest chain in country, profits were £78m and sales rose by 9.9%.
Group underlying profit before tax was £81m, up from £73m last year.
Recovery
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.