Co-op boss Richard Pennycook asks for a 60% cut to his pay package

Richard Pennycook’s base salary will be cut to £750,000 from £1.25 million

Richard Pennycook was finance director of the group, but took over as chief executive in 2014 when the former boss, Euan Sutherland, resigned after 10 months in the job. (PA)

The boss of the Co-operative Group has asked for his pay packet to be cut by 60 per cent having seen the first signs of success with his turnaround of the food-to-funerals conglomerate.

Richard Pennycook’s base salary will be cut to £750,000 from £1.25 million, while his incentives will be brought in line with other senior managers’.

The mutually owned firm’s chairman Allan Leighton said that reflected the Co-op’s shift from “rescue” to “rebuild”.

“We are in a different phase and [his pay] should reflect that he is the CEO of a co-operative movement as opposed to a CEO of a larger company.”

Leighton rejected the suggestion Pennycook was originally paid too much, adding: “Remember [The Co-op] was long gone and dead not long ago and the fact that you can see today that all facets of the organisation and business are growing… is a reflection of the work that’s been done.”

The Co-op was rocked by an overstretched balance sheet and faced near-collapse at its bank in 2013, which was later hit by a drugs scandal in involving the bank’s then-chairman, Paul Flowers.

Now two years into a £1.3 billion revival plan, it reported flat revenues for 2015 of £9.3 billion and underlying profit up 11 per cent at £81 million.

Like-for-like sales at its food business were up 1.6 per cent as it reaped the benefits of a move towards more convenience shopping. Funeral sales rose almost 10 per cent.