Co-op Boss Confirms Demand For 60% Pay Cut

The Co-operative Group has confirmed a pay cut for its chief executive, requested by Richard Pennycook himself, as its recovery is "firmly on track" with annual profits rising 11%.

The business, which was plunged into chaos in 2013 by a financial meltdown at its banking arm and a wider governance fiasco, reported that its rescue was over and rebuild well underway with an underlying profit before tax of £81m for 2015.

It credited growth in its food and funerals businesses, saying investment in its customer offerings was bearing fruit.

The Co-op also confirmed a story by Sky News on Wednesday that Mr Pennycook had requested his pay be slashed - now the hardest work had been completed in the turnaround of the business.

It will see his maximum remuneration fall by almost 60% after he took home £3m last year in pay and other awards.

His base salary will fall to £750,000 from £1.25m.

He said: "This has been a year of further progress at the Co-op as we have invested to drive the growth of our businesses.

"Underlying profits have increased but our priority this year has been on putting the building blocks in place for the long-term.

"Whether it’s our investment in lowering prices, rewarding colleagues or campaigning on key issues, we are taking the right steps and the performance of our businesses and the feedback from our members shows us we are on the right track.

"We are, however, only one year into our Rebuild and whether it is driving further growth in our businesses, improving member engagement or getting back to our campaigning roots, there is still much to achieve."

Co-op reported a rise of 1.6% in like-for-like food sales - with 97 new stores opened in 2015 and hundreds of others refurbished.

It was announced during the period it had become the most frequently visited convenience outlet and Co-op confirmed its expansion was to continue in 2016.

Funeral sales growth of almost 10% was put down to a death rate not experienced since 2008 and it plans to open 200 new funeral homes over three years.

Its insurance business recorded a £13m loss - hit by the impact of flooding in northern England.