The Co-operative Group’s CEO Euan Sutherland has spoken out to staff following reports over the weekend that the society is preparing to offer him a pay packet of £3.6m.
Documents leaked to The Observer revealed Sutherland would be paid a base salary of £1.5m this year, plus a £1.5m retention payment.
Six other directors will be paid salaries between £500,000 and £650,000 – plus retention, while FD Richard Pennycook will receive a £900,000 salary and retention of £900,000.
In a statement posted on the society’s staff Facebook page, Sutherland wrote: “I’m very sorry to have to report that we have had yet another leak to the media. It appears that, once again, the leak has come from our Group boardroom.
“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”
“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. Despite this, I am determined that we will see through the vital transformation of our business.”
He added that “leaking highly confidential internal documents to the media before decisions have been made only makes our open approach to discussion more difficult to sustain”.
Changes to the executive team will be announced on 17 March and its annual results, plus remuneration report, on 26 March.
“I wish I could promise you that this kind of occurrence will not happen again,” Sutherland said.
“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.”
And he added: “In a few weeks we will report large losses for the Group in 2013 and in April the inquiry by Sir Christopher Kelly into the Bank crisis will be published. These will bring further low points for us and the reputation of The Co-operative will take another hammering.
“But then we will be able to move forwards, first through Lord Myners’ report on our governance, and then in May we will have a much brighter story to share with you and with our members and customers as we unveil our new purpose and strategy.”
Yesterday, in a statement, Co-op Group chairman and Lincolnshire Co-op CEO Ursula Lidbetter said: “Last year The Co-operative Group faced the biggest crisis in its 150-year history with the need to recapitalise its Bank.
“We saved the Bank, without recourse to the taxpayer and we are now embarking on the long and complex journey to revitalise the wider Group. That means reducing debt, improving performance and streamlining a business that had become grossly inefficient.
“It is against that backdrop that we recruited Euan Sutherland and a top team with the skills and experience needed at this crucial stage in our history, reflecting the necessity for change. The remuneration packages of our executives are in the middle of a range of comparable companies. This represents an increase on the pay of their predecessors to reflect the greater commercial, management and turnaround experience they are bringing to bear.
“Euan and his team have already made a significant contribution to The Co-operative Group and we are confident that they will continue to do so.”