LONDON, March 9 (Reuters) - Britain’s Co-operative Group is set to pay up to 3.66 million pounds ($6.12 million) in pay and benefits to its chief executive this year and hike the salaries of other senior executives, the Observer newspaper reported on Sunday.
Citing documents prepared for the group’s remuneration and appointments committee, the Observer said big payouts for Chief Executive Euan Sutherland and his fellow directors are based on conparisons with similar sized listed companies.
The member-owned group has been rocked in the past year by the discovery of a 1.5 billion pound ($2.5 billion) capital hole in its banking arm and a drugs scandal involving ex-chairman, Methodist minister Paul Flowers.
According to the paper, the documents say the salary packages for directors are necessary because of the problems faced by the group amount to an “executive agenda (that) is possibly the most complex one facing a large business in the country today.”
The Observer said that under the latest pay proposals, Sutherland will be paid a base salary of 1.5 million pounds this year, plus a 1.5 million pounds retention payment.
With pension contributions and other extras, he will receive 3.66 million pounds in total, the paper said, adding Sutherland’s predecessor Peter Marks received just over 1.3 million pounds last year.
Richard Pennycook, Chief Operating officer will receive a 900,000 pounds salary and a further 900,000 retention payment while six other executives will be paid between 500,000 pounds and 650,000 pounds, according to the Observer.
In an emailed statement on Sunday following a request for comment on the Observer story, Ursula Lidbetter, Chair of The Co-operative Group, said: “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.”