The Co-operative defends plans for management salary hikes

The embattled group argued that the pay increase was necessary as Sutherland prepared The Co-op to recover from the biggest crisis in its history as scandals such as the £1.5bn hole in its banking arm and the allegations that former Co-op Bank chairman Reverend Paul Flowers bought hard drugs hit the business.

The Co-operative Group chair Ursula Lidbetter said the higher salaries across its management team reflected “the greater commercial, management and turnaround experience they are bringing to bear”. She said the pay packages were “in the middle of a range of comparable companies”.

Leaked documents showed that Sutherland will receive a basic salary of £1.5m plus a retention payment of £1.5m, which alongside pension contributions and other extras would total £3.66m.

Marks was paid just over £1.3m last year. Other Co-op senior executives will also be in line for big pay increases, the Observer reported, as the wage bill of its management team was set to double to £12m.

However, Labour Party shadow chief secretary to the Treasury Chris Leslie told Sky News the salary increases across the Co-operative were “very disappointing”. Leslie, who belongs to both the Labour and Co-operative parties, said: “I believe in mutuality, I believe in the co-operative principle but I happen to think that the Co-op should be acting differently.

“They recently put out a questionnaire to the public about their objectives, I didn’t see in that questionnaire anywhere anything about do you agree with extending high remuneration to senior executives so I have to say it’s a bit disappointing.”

Sutherland posted a personal response on the Co-op’s Facebook page on Sunday over the leak of his salary details. He said: “We seem to have an individual, or individuals, determined to undermine me personally. We appear to have disaffected people who are determined to make life difficult and embarrassing for The Co-operative at a time when what we need most are professionalism and loyalty to the business.”

Sutherland said the remuneration report is yet to be finalised.