CO-OPERATIVE GROUP boss Richard Pennycook has asked for a 40% cut in his base salary because the job has become easier.
Pennycook joined the Co-op as finance director, but took over as chief executive in 2014 when former boss Euan Sutherland resigned following the discovery of a £1.5bn hole in the Co-op Bank’s finances.
His base salary will fall from £1,250,000 to £750,000, while the cut reached as much as 60% once bonus payments are included.
Simon Walker, director general of the Institute of Directors, called the decision “refreshing”:
“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 is 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.
“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.