Former Co-op chief executive Shirine Khoury-Haq received a pay package worth almost £2m in 2025, despite the retailer falling into the red following a difficult year marked by a major cyber-attack and weakening sales.
Khoury-Haq, who stepped down from the mutual last month, was paid a total of £1.9m last year, according to the Co-op Group’s annual report.
The package included a £165,000 payout under the retailer’s “rewarding growth” incentive plan, which was approved by the board despite the group reporting falling sales and an underlying loss of £125m.
Khoury-Haq and other senior executives did not receive their standard annual bonus after the board said the business had failed to meet the “affordability underpin” required to trigger a payout.
However, her overall remuneration was boosted by a long-term performance award linked to earlier years.
In its report, the remuneration committee said it had approved a 10 per cent payout under the three-year “rewarding growth” scheme, which applies to all staff across the business.
It said the decision had been taken despite performance targets not being met on a formulaic basis, in recognition of the way employees responded during what it described as an “extremely challenging and difficult year”.
“The way our colleagues responded with resilience and professionalism to an unprecedented malicious cyber-attack was truly remarkable,” the report said.
The decision meant eligible full-time frontline workers, including shopfloor staff employed throughout 2025, received £100 each under the scheme.
Khoury-Haq’s total pay package was down from £2.2m in 2024, but remains likely to attract scrutiny given the group’s performance over the past year.
The report did not state whether she would receive compensation for loss of office following her departure, although it said she would not receive any further payments under the “rewarding growth” scheme.
It also noted that she could still be in line for a separate £682,000 performance-related award next May if conditions are met, without clarifying whether her exit from the business would affect that payment.
Khoury-Haq left the Co-op after four years as chief executive and almost seven years with the business in total. Her departure came just weeks after reports raised concerns about the culture at the top of the organisation.
Last week, she denied her resignation was linked to claims of a toxic working environment, saying the decision had been personal and driven by a desire to “go and do something else”.
The Co-op had previously pushed back against criticism of its leadership, saying in February that it did not believe the allegations reflected the views of its wider leadership team or workforce.
The group said it had “lost trading momentum” during the year as it focused on recovering from the cyber-attack, while also facing pressure from a contracting convenience market as consumers continued to rein in spending.
It added that it had faced around £150m in additional cost pressures during the year, driven by higher employer national insurance contributions, wage increases and packaging taxes.
Kate Allum, a Co-op board member and former chief executive of First Milk, has taken on the role of interim chief executive while the retailer searches for a permanent replacement.
A Co-op spokesperson said the “rewarding growth” scheme applied to all colleagues and that 53,000 eligible employees had received a payout this year.
They added: “The board exercised discretion to recognise the extraordinary effort of colleagues during a very challenging year, including their response to the cyber incident.
“The 10 per cent is the maximum outcome expected for this year and reflects both that contribution and our commitment to ensuring colleagues share in the recovery and future success of our Co-op.”
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