Co-op Group AGM: voting results

All the results from the Co-op Group's 2018 AGM

The Co-op Group held its annual general meeting at the Manchester Convention Centre on Saturday 19 May, where members voted on a total of 12 motions.

Welcoming members to the AGM, chair Allan Leighton first presented the results of the member-nominated director elections, which saw current directors, Hazel Blears and Margaret Casely-Hayford, re-elected.

After approving the annual report (Motion 1, carried with 98.19%and directors’ remuneration report (Motion 2, carried with 88.34%), members voted in favour of a change in the Executive Remuneration Policy (Motion 3, carried with 84.13%).

Supported by the board and the council, Motion 3 suggested increasing the part of pay which links to performance. Regarding the chief executive’s pay, the motion called for increasing performance pay from 200% to 250% of base pay.

“No payment would be made if performance is not good enough, but depending on the level of results achieved a payment of between nil and 250% of salary could be made,” read the motion.

Independent non-executive director and chair of the remuneration committee, Stevie Spring pointed out that CEO Steve Murrells and deputy CEO Pippa Wicks had not had a pay rise since being promoted.

The supporting executive team has also been brought down from nine to six colleagues, she said. “New members of the senior executive team have packages substantially lower than the ones of the colleagues whom they replaced,” she said, adding that the wider senior leadership population had also been reduced by 25% to 75.

Ms Spring said that Mr Murrells had not had a pay rise since 2014, in spite of being promoted to the CEO position in 2017, following the departure of former CEO Richard Pennycook. While most differentials between the chief executive’s and the other executives’ pay is around 50%, Mr Murrell’s pay is 15% higher than his other executive colleagues’.

“We could increase his salary but a much better way is to increase the part of pay which varies with performance, from 200% to 250% of salary. Nothing gets paid if performance isn’t good enough. We think this is fair to Steve, to members and his colleagues,” she added.

Members also approved the re-election of Ian Ellis as an Executive Director (Motion 4, carried with 95.99%), Lord Victor Adebowale as an independent non-executive director (Motion 5, carried with 93.17%), Simon Burke as an independent non-executive director (Motion 6, carried with 95.37%), and Stevie Spring as an independent non-executive director (Motion 7, carried with 95.72%).

Motion 8, to re-appoint Ernst & Young LLP as the Group’s auditors and authorise the Risk and Audit Committee to fix their remuneration, was carried with 94.6% of the vote.

Motion 9, to approve changes to the Group’s rules to simplify processes to remove dormant or absent members and move the maximum terms of office of nine years – from the current maximum of six – for both member nominated director and independent non-executive directors, was carried with 88.91%.

Motion 10, which was proposed by the Board and the Group’s National Members’ Council, addressed the approval of political expenditure of up to £750,000 for the year commencing 1 January 2019, and was carried with 79.38% of votes.

The motion highlighted how the Group is a founding member of the Co-operative Party and has representation on its National Executive Committee. A subscribing member of the party, the Group has agreed to contribute £625,600 for 2018, and with the motion being approved, the Group will continue to be a subscribing member – but will be able to make additional small donations to other political parties, campaigns and organisations which support co-operative values and principles.

Members also carried Motion 11, another joint Board and Council motion, to make 100% of packaging easy to recycle, with 99.06% of votes in favour.

“Unlike other retailers, our target is based on product lines and not weight, as this is how our customers look at packaging,” read the motion. Currently, 71% of Co-op brand products are in easy to recycle packaging, an increase from 46% in 2016.

The mutual has already made changes to meat and fish packaging, and trialled fully compostable tea bags. In 2017, it introduced cardboard pizza disks and, more recently, announced it would move its water bottles to material made from 50% recycled plastic.

During the meeting, chief executive Steve Murrells said the retailer will be trailing a plastic bottle return scheme, with members receiving Co-op Food vouchers when returning plastic bottles.

Members attending the AGM raised concerns about focusing on recycling without setting out targets for reducing plastic use in packaging. “We cannot recycle our way out of this problem. The UK doesn’t have the capacity of recycling all this waste,” said one member. Steve Murrells confirmed the Co-op would be exploring the idea of setting targets. “We feel that we are leading in many areas, let’s take it away and see what we can do,” he said.

Finally, members also voted in favour of Motion 12, a member’s motion asking the board to review and report on the impact of the co-operative’s current advertising policy, carrying it with 96% of the vote.

Submitted by Colin Baines, a former ethics adviser and campaigns manager for the Co-op Group, and non-executive director of Stop Funding Hate (SFH), it was backed by 200 other SFH-supporting Group members.

Thanking the council for supporting the motion, Mr Baines said the Daily Mail, the Daily Express and the Sun (some of which carry Co-op Group advertising) had been specifically singled out by the United Nations as UK media outlets that “are fuelling and legitimising prejudice and an increase in hate crime”.

The motion noted that the Group had responded positively to member concerns on this issue and has introduced an advertising policy to “challenge those views expressed in print which we and many of our members believe are incompatible with our values” and “use our contacts with publishers at every level to make the case for change”.

It also asked the Board to review the impact of the current advertising policy and report to members: the specific issues publications have been engaged on; the impact of this engagement; and processes by which impact is monitored.

“If the Board’s review finds it unable to report impact, we ask it to prepare an ethical advertising policy that puts controls in place to ensure adverts do not appear in media that are incompatible with co-operative ethics, values and principles,” read the motion.

However Steve Murrells told delegates at the AGM that advertising was a “more complex ethical issue” than it appeared. He argued that some of the positive issues the Group had been campaigning on had been highlighted in the Mail, which, he said, was championing issues such as plastic waste and loneliness.

The Sun, the Daily Mail and the Express are sold in co-op shops and drive sales, he said, adding that the Group would aim to engage with the readers of these publications.

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