The Co-op chief executive Euan Sutherland has resigned amid controversy over his pay packet and finance chief Richard Pennycook has taken temporary charge.
Sutherland tendered his resignation yesterday, just a day after details of his proposed annual pay were leaked to the press. His resignation was confirmed today with immediate effect, he will not receive any retention payments.
Richard Pennycook has taken over as interim chief executive. Pennycook joined the mutual last year as finance chief and has considerable City experience, most recently as finance boss at Morrisons.
In a letter of resignation Sutherland is understood to have said the group is "ungovernable". Sutherland was "demoralised and fed-up" and that the letter is broadly a 'back-me-or-sack-me', it has been reported.
Sutherland was in line to receive a base salary of £1.5 million this year, plus a £1.5 million retention payment.
The sum would have totalled £3.66 million this year including pension contributions and compensation for buying him out of his previous contract compared to predecessor Peter Marks who received just over £1.3 million last year.
Sutherland hit out at “an individual, or individuals, determined to undermine me personally”, on The Co-op’s Facebook page at the weekend.
Sutherland said: "It is with great sadness that I have resigned as chief executive. I have given my all to the business and had hoped to be able to lead its revival. However, I now feel that until the Group adopts professional and commercial governance it will be impossible to implement what my team and I believe are the necessary changes and reforms to renew the Group and give it a relevant and sustainable future.
"I will not accept the retention payments and long term incentive payments previously agreed for the delivery and protection of value in the Group and the Bank, even though this was successfully delivered.
He added: "I would like to thank all of the Co-op's hard working colleagues for the support they have given me during my time. I wish them all well. The Co-operative has some wonderful people who deserve a great future."
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Co-op group chair Ursula Lidbetter said: "It is with deep regret that I accept Euan's resignation. Last year, Euan and his team saved the The Co-operative Bank, without recourse to the taxpayer, and in doing so rescued the Group from the biggest crisis in its 150-year history. They have worked night and day to renew the organisation and to give it a sustainable future."
Pennycook said: "Our businesses continue to perform in line with the clear commercial plans put in place under Euan's leadership and I and the team will plot a steady course in the coming months."
Sutherland joined the company in May last year, having been chief operating officer of B&Q owner Kingfisher, and immediately began attempting to rescue The Co-op’s banking arm from a £1.5 billion hole in its finances.
He has assembled a top team brought in from outside the organisation to attempt
