Speaking last Tuesday after Mr Sutherland resigned, the founder of NBNK Investments – the rival consortium to the Co-op Bank for the disposal of Lloyds Banking Group assets, known as Project Verde – said: “I can’t imagine this will do much good for confidence in the bank.”
Mr Sutherland joined the Co-operative Group last May from retailer Kingfisher Group, where he was chief operating officer. He had previously held management roles at Mars Confectionery, Currys and Superdrug.
His resignation was accepted by the Co-operative Group board on Tuesday afternoon. He will be replaced on an interim basis by chief financial officer Richard Pennycook.
Mr Sutherland came under fire last weekend after plans to increase executive pay were leaked to the press.
It was proposed that Mr Sutherland would receive a total remuneration of £3.66m for this year, with other senior executives also receiving substantial increases.
The move was defended at the time by Co-operative Group chairman Ursula Lidbetter, who said they represented the “greater commercial, management and turnaround experience” of the group board.
Mr Sutherland took to the Co-op’s staff page on social network Facebook to proclaim his regret over the leak, claiming it was an attempt to undermine him, but the comments were met with derision by disgruntled staff and customers of the bank. It was subsequently reported that Mr Sutherland offered to resign, stating that he believed the group was “ungovernable” in its current state.
Lord Levene added: “No other business in the UK compares with this and you have to ask whether the group has now run its course.”
When asked if they would intervene in the Co-operative Group, spokesmen at the Treasury and Prudential Regulation Authority declined to comment.
Mark Taber, who acted as spokesman for Co-operative Bank retail bondholders last year, said: “It’s probably better to have a smaller more competent and well-paid board than the large one that ran the group and the bank up to last year.”
Ian Broadbent, director of Lincolnshire-based Blue Sky Mortgages, said: “I can see the common sense in paying for the best people to get the bank and the group back on its feet, but not when you compare it to the Co-op’s competitors.”