In the week BP gave its chief executive a 20% pay rise as a reward for its share price falling 13% in a year, the Co-operative’s chief executive asked for – and got – a pay cut despite saving the company from ruin thanks largely to filling a £1.5bn ($2.1bn, €1.9bn) hole in its banks’ finances.
Richard Pennycook, the co-op’s chief exec, gave his logic as given the company is on a far stronger footing than when he took over a year ago his job is now that much less demanding.
I am sure that BP chief executive Bob Dudley is a million miles from arguing that his job is less demanding right now, and that he is a lot closer to saying he should be viewed on more than delivering against just one year’s profit ($8.1bn in 2014) or loss (of $5.2bn last year – its largest ever annual loss); that a bigger overall strategy is being designed and delivered; and that the losses were down to factors outside his control such as settlements due to Deepwater Horizon and a fall in the price of oil.
BP’s shareholders will have their say on 14th April at the annual general meeting with many of their views summed up by Ashley Hamilton Claxton, corporate governance manager at Royal London Asset Management, who describes the increase as “both unreasonable and insensitive”.
I could not agree more.
As far as the public is concerned, within financial services it is the bankers who have held the torch for many years as having huge salaries as their reward for failure. However, if PwC is to be believed, then the asset management industry could be next.