CO-OP Bank bondholders yesterday backed a £3.66m pay deal for the wider group’s chief executive Euan Sutherland as the storm over the pay award intensified.
Sutherland has been in the firing line over the plans after details appeared in The Observer newspaper on Sunday. He later said figures were leaked by members of his own board briefing against him.
Co-op Bank retail bondholder campaign boss Mark Taber, who led a push last year to salvage cash for 13,000 investors in Co-op bank bonds, told City A.M. yesterday the company needed to pay well to attract experienced people.
“If you’ve got a lot of problems and you want someone to sort them out you have to pay the market rate. If you’re the Co-op you’re still in the market, so you can’t pay half the market rate” he said.
“Things were a lot worse when he took the job and to retain him they need to pay him. They can’t carry on like they have been.”
Sutherland is set to receive a pay deal worth £1.5m of salary in addition to a £1.5m compensation payment.
The Co-operative Group is the largest shareholder in the Co-op bank, with a 30 per cent stake. The bank underwent a painful restructuring last year which saw hedge fund buy the rest of the bank.
Last night it emerged the bank was considering asking shareholders permission to pay executive staff bonuses worth up to twice their salaries.
“We need to be willing to pay people to take career risk,” boss Niall Booker told the FT.