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| Majority of investors reject pay deal for Royal Mail's chief executive | Majority of investors reject pay deal for Royal Mail's chief executive |
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| More than two-thirds of Royal Mail shareholders have voted in protest against the pay arrangements of the new chief executive of the privatised postal service. | |
| Rico Back, a Switzerland-based executive who will commute to the UK in order to run Royal Mail, is being paid 17% more than his predecessor Moya Greene. Back will receive a basic salary of £640,000 – and will still receive the sum because Thursday’s vote, in which more than 70% of investors voted against, is only advisory. | |
| The new Zurich-based boss was previously the chief executive of a subsidiary of Royal Mail and has also been given a £6m golden hello to renounce his former contract and take up the new job as group chief executive. | The new Zurich-based boss was previously the chief executive of a subsidiary of Royal Mail and has also been given a £6m golden hello to renounce his former contract and take up the new job as group chief executive. |
| Shareholder advisory firms ISS and Glass Lewis had both urged shareholders to vote against the pay deal at Royal Mail’s annual shareholder meeting in Sheffield – in part because Back is getting £100,000 a year more than outgoing boss Greene. | Shareholder advisory firms ISS and Glass Lewis had both urged shareholders to vote against the pay deal at Royal Mail’s annual shareholder meeting in Sheffield – in part because Back is getting £100,000 a year more than outgoing boss Greene. |
| Royal Mail defended Back’s salary level, saying it makes up for a lower cash pension allowance, and that his total fixed pay and benefits will be in line with Greene’s. | Royal Mail defended Back’s salary level, saying it makes up for a lower cash pension allowance, and that his total fixed pay and benefits will be in line with Greene’s. |
| But ISS pointed to part of Royal Mail’s pay policy in 2016, which said its remuneration committee “recognises that the pension provision is high” and that it would “adopt a lower percentage for newly appointed executive directors”. | But ISS pointed to part of Royal Mail’s pay policy in 2016, which said its remuneration committee “recognises that the pension provision is high” and that it would “adopt a lower percentage for newly appointed executive directors”. |
| ISS had also raised a red flag over Greene’s payouts, which include a full-year cash bonus of £774,000 and 12 months’ salary after she departs in September. | ISS had also raised a red flag over Greene’s payouts, which include a full-year cash bonus of £774,000 and 12 months’ salary after she departs in September. |
| Royal Mail defended those payments, saying: “Moya Greene is an exceptional executive and we have made the right remuneration arrangements to reward the generation of shareholder value in the longer term and to honour our contractual obligations.” | Royal Mail defended those payments, saying: “Moya Greene is an exceptional executive and we have made the right remuneration arrangements to reward the generation of shareholder value in the longer term and to honour our contractual obligations.” |
| Earlier this week, Royal Mail reported a 7% fall in letter revenues in the most recent three months, while UK parcel revenues rose 6%. Overall revenues in the UK division were down 1%, while overall group underlying revenues were up 2% thanks to an 11% surge in turnover at its European parcels business, General Logistics Systems (GLS) – the operation run by Back. | Earlier this week, Royal Mail reported a 7% fall in letter revenues in the most recent three months, while UK parcel revenues rose 6%. Overall revenues in the UK division were down 1%, while overall group underlying revenues were up 2% thanks to an 11% surge in turnover at its European parcels business, General Logistics Systems (GLS) – the operation run by Back. |
| The proxy votes declared at the AGM were 70.18% against the directors’ remuneration report with just 29.82% in favour. | The proxy votes declared at the AGM were 70.18% against the directors’ remuneration report with just 29.82% in favour. |
| Orna Ni-Chionna, chair of the group’s remuneration committee, said: “We recognise and understand the reasons why our shareholders felt they could not vote in favour.” She said Royal Mail had “already been in contact with many of them and will reflect very carefully on their main concerns” at the next review of the company’s remuneration policy, which will take place in the autumn.” | Orna Ni-Chionna, chair of the group’s remuneration committee, said: “We recognise and understand the reasons why our shareholders felt they could not vote in favour.” She said Royal Mail had “already been in contact with many of them and will reflect very carefully on their main concerns” at the next review of the company’s remuneration policy, which will take place in the autumn.” |
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