Co-operative Group chief Richard Pennycook has asked for a drastic pay cut in an unusual move that might set off as an example for corporates everywhere. His base salary will drop to £750,000 from £1.25m and his other incentives will be altered and aligned with what is given to other senior managers. To sum up, his annual remuneration will fall by almost 60 per cent.
Co-op's chairman Allan Leighton said the decision reflected Pennycook's shift from “rescue” to “rebuild”. “We are in a different phase and should reflect that he is the CEO of a co-operative movement as opposed to a CEO of a larger company.” While Pennycook is the only executive taking such a cut, but Leighton said others volunteered to have their pension contributions cut to 10 per cent of salary from 16 per cent. Notice periods have also been slimmed to six months instead of 12.
Director Stefan Stern said, “This is a very welcome example of that rare thing called restraint. He is setting a very good example in the organisation and beyond. Pennycook has been hailed for setting a good example need to see this and feel encouraged to be braver about what incoming CEOs might make. They need to recognise that the best person and best value for money might not make the most outrageous amount of money.”
