CO-OP LASHED FOR £3M PAYOFFS AS IT UNVEILS A £2.5BN LOSS

THE Co-op has come under fire for dishing out almost £3m to a clutch of ousted executives, writes James Salmon.

The ‘loss of office’ payments include more than £1m for its former human resources chief Rebecca Skitt ( below), who was placed on gardening leave in February.

The awards were branded ‘preposterous’ last night by campaigners and emerged as the Co-op Group confirmed a £2.5bn loss last year.

Others to receive handsome payoffs include former finance boss Stephen Humes, awarded £693,000; deputy group chief executive Martyn Wates who received £730,000; and director of Co-operative Relations Mark Craig, who pocketed £469,000.

The payoff for former chief executive Euan Sutherland ( left), who quit last month after details of his £6.6m two-year pay package were leaked, will be revealed in next year’s annual report.

Luke Hildyard of the High Pay Centre said: ‘These payments are preposterous – particularly for an HR director, effectively an administrative role.’

The Co-op also confirmed it had awarded controversial ‘retention payments’ worth £4.1m to nine executives, including £750,000 for interim chief executive Richard Pennycook.

He will receive a maximum package of £3.3m for this year if he hits performance targets, including a £400,000 annual allowance.

In a bid to quell criticism, the Co-op said the retention payments will now pay out only if certain performance targets are met.

The huge losses were driven mainly by a £2.1bn loss in the bank. But further details of the Co-op’s disastrous 2009 swoop for Somerfield also emerged.

The mutual took a £226m write-down on the deteriorating value of the stores. Profits in the food arm fell from £269m to £247m.

The Co-op admitted it incurred a £197m bill for the lease of 645 ‘units’ and it confirmed plans to sell around 60pc of Somerfield stores to focus on smaller convenience shops. The report also revealed it had valued the bank on a ‘prudent’ basis at £735m, less than half the £1.5bn pumped into it in December to save it from collapse.