Blog: Co-op exec pay details fly in face of PR drive
Katy Askew | 10 March 2014
Details of The Co-operative Group's pay agreement with chief executive Euan Sutherland attracted criticism in the weekend press as it emerged that his package this year is worth around GBP3.6m.
Sutherland will reportedly receive a base salary of GBP1.5m this year, plus a GBP1.5m retention payment. Pension contributions and a contribution for buying him out of his previous contract with Kingfisher brings the total up to a cool three-and-a-half mil.
At a time when the UK mutual would seem to be gearing up to report heavy losses - primarily driven by the disastrous performance of the group's baking arm - echoes of much derided "bankers bonuses" and the controversy that they attract are clear. Industry watchers expect the Co-op's losses to stack up to around GBP2bn last year.
Sutherland took to the Co-op's workers' Facebook page to retort: "We seem to have an individual, or individuals, determined to undermine me personally, my team and the rest of the group board regardless of the uncertainty and disruption this causes to our 90,000 colleagues and our supportive members."
He added: "I wish I could promise you that this kind of occurrence will not happen again. You deserve to hear information in a proper, orderly and considered fashion. But we appear to have disaffected people who are determined to make life difficult and embarrassing for The Co-operative at a time when what we need most are professionalism and loyalty to the business."
This is all very well. And Mr Sutherland could very well be the right man for the job of turning around the Co-ops fortunes. He joined the firm last May and has since rolled his sleeves up and started forming a strategy to improve the cooperative's performance.
But herein lies the rub. Conspiracy theories aside, the grand reveal could have some implications for The Co-operative's drive to reposition and revitalise the brand.
The Co-op recently launched a massive PR campaign to get the communities in which it operates engaged and to give its members - its owners - the opportunity to "have their say" in the running of the business. We recently argued on these pages that community involvement is a splendid idea for the Co-op - and one that can only pay dividends in terms of customer loyalty.
I heard an add on the car radio this morning. A chap with a regional accent (clearly one of us regular types) was talking about how important the initiative is, about how the Co-op belongs to UK consumers and therefore works for the benefit of us... But the idea that these lofty executives get paid more in one year than most of us make in ten - at a time when the mutual is in dire straights - seems to detract significantly from this message.
And yes, I am aware of all the arguments that companies have to pay for top talent. But it does rather detract from the "one of us" PR message that the Co-op is currently trying to leverage.
The UK's Serious Fraud Office has launched an investigation into the GBP263m (US$424.6m) black hole in Tesco's accounts, the retailer confirmed today (29 October)....
A mobile app that claims to be the "most comprehensive food-rating database available" to US consumers has raised the hackles of the country's food manufacturers....
Just weeks after announcing a purchasing tie-up in France with local rival Systeme U, Auchan has outlined an international agreement with Germany's Metro Group....
Saudi food-to-retail group Savola has posted a mixed set of profit figures for the first nine months of the year....
Tesco has reported a massive 92% drop in first half profits as the accounting fiasco continues to widen....
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