Co-op ex-chief departs with £2m package amid cyber fallout

Just weeks after facing scrutiny over workplace culture, Shirine Khoury-Haq, the former CEO of the Co-op Group, has exited the mutual with a £1.9 million exit package – a sum that raises eyebrows given the retailer’s recent struggles, including a significant cyberattack and a £125 million underlying loss.

A reward for a difficult year?

The remuneration details, outlined in the Co-op’s annual report, reveal a complex structure. While Khoury-Haq didn’t receive the standard annual bonus due to the company's performance, a “rewarding growth” incentive plan—approved by the board despite the downturn—delivered her a substantial £165,000. This echoes a broader payout, albeit a small one, to frontline staff, who received £100 each as recognition for their efforts during the challenging year, particularly in response to the cyber incident.

But what’s truly striking is the long-term performance bonus linked to prior years, contributing significantly to the overall £1.9 million figure. The board’s decision to award a portion of this bonus, despite the company’s financial woes, underscores a disconnect that will likely fuel criticism.

The cyberattack, which crippled operations last year,exposed vulnerabilities and significantly impacted trading momentum. The group also cited pressures on household budgets and a “contracting convenience market” as contributing factors to the losses. Layered cost headwinds, amounting to £150 million, further squeezed margins—a combination of increased national insurance, pay, and packaging taxes.

Kate Allum, formerly of First Milk, has stepped in as interim CEO while the Co-op searches for a permanent replacement. Khoury-Haq’s departure follows reports of a “toxic” work environment at the top, allegations she vehemently denied, citing a “personal decision” to pursue other opportunities. However, the timing, and the significant financial package accompanying her exit, will inevitably raise questions about the true nature of her departure.

The Co-op insists the incentive plan is designed to share future success with colleagues, stating that the 10% payout represents both recognition of their hard work and a commitment to recovery. The reality, though, is that the optics are poor. While acknowledging the challenges, handing over nearly £2 million to an outgoing CEO while the company struggles to regain its footing suggests a system out of sync with the values of a consumer-owned cooperative.

The lingering question isn't just about the fairness of Khoury-Haq’s package, but about the culture within the Co-op itself – a culture that seemingly rewards executives handsomely even as the Business faces considerable headwinds and frontline workers navigate a challenging retail landscape.