The chief executive of the Co-operative Group, Euan Sutherland, resigned abruptly this week after details of his latest pay deal had been leaked and widely criticised. Sutherland, who had only led the group for ten months, called it "ungovernable" in his resignation letter. He was hoping to change the complicated governance structure at the stricken mutual into an arrangement more typical of quoted companies.
What the commentators said
But Sutherland should have approached reform more sensitively, said Nils Pratley in The Guardian. The arrival of "a cadre of quoted company executives was bound to put a few noses out of joint". His task was to "cajole and persuade recalcitrants". It would have been understandable for him to give up if a set of governance reforms had been rejected by the current regime, but the debate hadn't even reached that point.
By resigning now, he gives the impression that he "couldn't take a bit of heat" over his pay packet, which was indeed "preposterous". Even a Tesco boss would struggle to justify £3.6m in the first year and £3m in the second. "Throwing a Facebook fit" after the details were leaked, and leaving shortly after this rant at "disaffected" board members, will do nothing for his reputation, added Jim Armitage in The Independent. Talk about "petulance and flounce".
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Still, one must sympathise with his frustration at the board, said the FT's Andrew Hill. "Compared with the straightforward hierarchy of a publicly listed company, it looks like a soup of conflicting interests." The Co-op should now push through the new governance structure, and get on with cutting debt and widening margins "under a boss with broader shoulders", said Jonathan Guthrie in the FT. "The alternative is a place in the museum of Labour bygones, betwixt the banner of a long-dead friendly society and a dented cellphone once lobbed by Gordon Brown."
-
Investing in AI – the ultimate bubbleIs it “different this time”, or are we in the mother of all bubbles? The economics of AI should give investors pause for thought, says Dan McEvoy
-
Why MoneyWeek studies at the Austrian school of economicsA heterodox tradition in economics has been a guiding light for MoneyWeek over our 25 years, says Stuart Watkins
