Co-operative chief requests pay cut as 2015 profit slumps

The Co-operative Group said on Thursday that its chief executive has requested a substantial reduction in his remuneration package as it reported a big slump in 2015 pre-tax profit.

Pre-tax profit dropped to £23m from £124m the previous year, reflecting major investment in the business this year and £a 121m one-off gain from disposals last year.

Meanwhile, group revenue was stable at £9.3bn compared with £9.4bn in 2014.

The Co-operative invested £125m lowering food prices and cut the price of fruit and vegetables by more than 15% in 2015 to support healthier eating choices.

Food like-for-like sales were up 1.6%, with LFL volumes up 5%. The group’s core convenience business grew ahead of market after investment in price and products, with LFL sales 3.8% higher.

Chief executive Richard Pennycook said: “This has been a year of further progress at the Co-op as we have invested to drive the growth of our businesses. Underlying profits have increased but our priority this year has been on putting the building blocks in place for the long-term.

“Whether it’s our investment in lowering prices, rewarding colleagues or campaigning on key issues, we are taking the right steps and the performance of our businesses and the feedback from our members shows us we are on the right track.”

The company also said on Thursday that Pennycook has requested that his pay be cut by nearly 60% now that the rescue of the Co-op is complete and the rebuild of the group well under way.

From 1 July, Pennycook’s base pay will be cut to £750,000 from £1.25m, with his bonus and pensions contributions also reduced.

“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,” said non-executive chairman Allan Leighton.