War breaks out in Co-op boardroom

 
Michael Bow
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CO-OPERATIVE chief executive Euan Sutherland yesterday launched a furious attack on members of his own board after a suspected leak revealed details of his £3.66m pay deal.

Sutherland took the unusual step of posting on social network Facebook to lash out at the “individual, or individuals” on the Co-op board who he said were determined “to undermine me personally,” after details of his remuneration deal were revealed early.

“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,” he said in an update on the Co-op employees, which was posted on Facebook.

An ongoing probe into leaks at the group is understood to have intensified yesterday after details of the annual remuneration report, set to be unveiled on 26 March, appeared in the press yesterday.

Sutherland, a stalwart of large consumer groups throughout his career, is set to receive £1.5m in salary and a £1.5m retention payment, according to the proposals, reported in The Observer newspaper.

A further £660,000 in pension payments and other pay will take his award to £3.66m, more than double that of predecessor Peter Marks. It comes as the group prepares to unveil large annual losses later this month.

Board chair Ursula Lidbetter defended the deal yesterday, saying the pay reflected Sutherland’s professional experience. “The remuneration packages of our executives are in the middle of a range of comparable companies,” Lidbetter said.

“This represents an increase on the pay of their predecessors to reflect the greater commercial, management and turnaround experience they are bringing to bear.”

Sutherland was previously chief operating officer of Kingfisher, where he was paid £744,600 in 2012-13 after leaving his board role after three months to join the Co-op.

The pay controversy reveals the tensions between Co-op’s role as a mutual and a commercial organisation.

Labour shadow chief secretary to the Treasury Chris Leslie said the pay hike was “very disappointing”.

“I believe in the co-operative principle but I happen to think that Co-op should be acting differently,” he said on Sky News yesterday.