Co-op Group CEO flounces out

published 13 March 2014

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".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

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

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."

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.