Euan Sutherland, former chief executive of The Co-Operative Group, will receive a £1m pay-off.
Sutherland stepped down in March after 10 months in the role after details of a proposed £3.6m pay package were exposed to the media. The information was badly received as the society is looking to reduce its £1.4bn debt and is considering job cuts.
“Euan Sutherland was on a 12-month notice period as group chief executive,” said a statement. “When he resigned in March, the board did not feel it appropriate to ask him to work his notice period and exercise its rights to put him on gardening leave, which is normal practice for a senior executive.”