Strange goings-on at the crippled Co-op, where chief executive Euan Sutherland was reported to have tendered his resignation in anger at a leak of plans to pay him £3.6 million for his first year’s work — vastly more than his predecessor, and despite group losses of £2 billion resulting from a black hole in its bank. As a retailer trained in the ways of Currys and Kingfisher, Sutherland evidently feels the Co-op is too politicised to reform, and that elements within it are determined to undermine him.
The benign alternative form of capitalism that the Co-op represents is now on the edge of collapse; survival for a diminished retail and funeral business may come at the cost of closing down the bank. The causes of failure are certainly deeper and wider than the dissolute behaviour of its former chairman, Revd Paul Flowers. But this was clearly the wrong moment to throw salary-doubling ‘retention payments’ at Sutherland and his senior team to persuade them to accept the challenge.
Distorted executive pay is a factor in almost every story of a company in trouble, yet the corporate world — obsessed by peer-group comparison — is barely aware of the monster it has created.
This is an extract from Martin Vander Weyer’s Any Other Business column in this week’s Spectator.