The Co-operative Group plans to increase colleague pay, taking into account hourly rates recommended as a living wage by the Living Wage Foundation. At their annual general meeting in Manchester members voted in favour of a motion encouraging the Group to “take further positive steps on colleague pay”.
The Group is already paying the National Living Wage, which was introduced as a legal requirement with effect from April 2016. However, the compulsory minimum wage premium only applies to staff over 25 years of age. The government rate of £7.20 is separate to the Living Wage rate calculated by the Living Wage Foundation. The Foundation’s living wage stands at £8.25 across the UK and £9.40 in London and covers an age group of 18 and older.
Introducing the motion, senate member from Thatcham, Tricia Davis, said: “The society has made significant progress and we’re keen to ensure we maintain this momentum.”
The motion was supported by both the board and the council and was carried by 98.66%.
Stevie Spring, independent non-executive director and chair of the Group’s Remuneration Committee told the AGM that pay reward was a “high topic in any organisation”, particularly the issue of senior executive pay.
“We’re not a company, we’re a co-operative, but we do have to compete for talent with these companies,” she explained. “We do have millions of members voicing concerns directly or through the committee and we’ve been listening and, more importantly, acting on them. Our co-op is now in a very different place than it was a couple of years ago.”
Ms Spring told delegates how in 2014 the remuneration committee had put in place remuneration packages to make sure it held the executive team together to rise through these challenges.
“We now need to make sure we have a policy fit for that recovery. We have made changes already to reflect that but a lot more work needs to be done,” she said.
A key change announced in April this year was the voluntary pay cut taken by chief executive Richard Pennycook.
“Richard has voluntarily chosen to change his arrangements for his salary, a total of 60% pay cut to reflect he’s no longer managing a business in deep crisis with the demands and reputational risks that those entailed,” explained Ms Spring.
Speaking about colleagues’ pay, she added that the 8.5% rise for the Group’s 40,000 colleagues has meant a pay increase of £1,200 for employees. “That increase takes pay above government’s National Living Wage,” said Ms Spring.
She added that pensions were also “aligned, fair and affordable”, with colleagues having the opportunity of an employer contribution of a maximum of 10%. For the executive team, the contribution was reduced from 16% to 10%, in line with all other employees.
The executive’s notice period has also been reduced from 12 months to six months while incentive schemes are now reflecting not only personal performance but also the overall progress of the business.