The Co-operative is to hand a £3.6 million pay deal to its chief executive, despite facing a £2 billion loss after the biggest crisis in its history.
The mutual argues that Euan Sutherland's proposed remuneration package will be in line with comparable firms and reflects the scale of the task he faces.
But the pay award comes at a time when the group is facing large-scale job cuts after a disastrous year in which its banking arm needed rescuing due to a £1.5 billion hole in its balance sheet.
According to the Observer, Mr Sutherland will receive a base salary of £1.5 million this year, plus a £1.5 million retention payment. He joined the company last year, having been chief operating officer of B&Q owner Kingfisher.