Co-op boss asks for pay cut as troubled firm 'turns corner' with rise in sales
The chief of the Co-operative Group asked for a pay cut yesterday after claiming the company had "finally turned a corner", as reflected in rising sales.
Chief executive Richard Pennycook requested that the board slash his salary from £1.25m to £750,000 as the troubled mutual entered "calmer waters".
The firm, which has 48 supermarkets in Northern Ireland, said like-for-like sales across its 2,800 food stores grew by 1.6% in the 52 weeks to January 2, while its funeral business also saw sales climb by 9.9%.
Mr Pennycook told BBC Radio 4's Today programme: "We've been through a difficult period which was very intense and I hope members would regard my remuneration as having been appropriate for that time, but we're now in calmer waters, we're a different sort of organisation owned by its members."
The company's pre-tax profits hit £23m, down from £124m in 2014 when it was boosted by a £121m one-off disposal.
Underlying profits in the food business rose 3.3% to £250m as strong sales and moves to cut costs helped performance.
The funeral business also bolstered underlying profits by 18% to £78m over the period.
Group revenues fell slightly to £9.3bn, down from £9.4bn in 2014, while group underlying pre-tax profits rose to £81m, up from £73m in the last results.
Mr Pennycook said: "This has been a year of further progress at the Co-operative Group 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.
"We are, however, only one year into our rebuild and whether it is driving further growth in our businesses, improving member engagement or getting back to our campaigning roots, there is still much to achieve.
The reduction in Mr Pennycook's base salary combined with a significant reduction in his bonuses will see his total pay drop by more than 60%.
Meanwhile, chairman Allan Leighton said he would waive his £250,000 annual pay and donate it to the Co-operative Community Investment Foundation.