The Co-operative Group’s chief executive has requested a 60% cut to his total remuneration package.
Richard Pennycook (pictured) will see his base salary reduce from £1.25m to £750,000 from July 2016.
From 2017, the maximum annual incentive plan award will fall from 100% of base salary to 40% of base salary, and the maximum long-term incentive plan payment will reduce from 100% to 50% of base salary.
In addition, pension changes, which lower the executive pension benefit allowance from 16% to a maximum of 10% of base salary in order to bring it in line with the rest of the group’s workforce, mean Pennycook’s maximum total remuneration package will decrease by more than 60%.
Pennycook’s remuneration package totalled £3.59m in 2015.
Allan Leighton, independent non-executive chair at the Co-operative Group, has donated his £250,000 salary to the Co-operative Community Investment Charity.
According to the organisation’s Annual results 2015 report, no increases to base salaries were awarded to group executives in 2015 and no increases will be made in 2016.
Simon Walker, director general at the Institute of Directors, said: “The Co-operative Group has had a very difficult couple of years, culminating in a radical restructuring of the business. During this time Pennycook has had to work hard to get the Co-op back on track. His pay reflected this additional work.
“Now this has finished, he has taken it upon himself to ensure that his salary reflects the work that will be required of him going forward. This is refreshing and should be seen as a lesson for other businesses.”