Royal Mail readies for battle with shareholders

[TrueBlueTerrier]

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Revolt likely over £1.35m pay package for Moya Greene and the chief's warning that its universal service obligation is at risk



Royal Mail will this week face a stormy shareholder protest when the company holds its first annual meeting since its controversial privatisation.

The 500-year-old company is likely to face questions about the £1.35m pay package awarded to the chief executive, Moya Greene, and its warning that the universal service obligation – the pledge to deliver to every address in the country for the same price six days a week – is under threat.

The company, which the government privatised in October 2013 at a £1bn loss to the taxpayer according to a committee of MPs, will hold its first annual meeting as a FTSE 100 firm in Birmingham on Thursday. It will also update the City on its latest financial performance, which has been worrying some analysts, in an interim management statement on Tuesday.

Royal Mail's chairman, Donald Brydon, also chairs the FTSE 100 software firm Sage Group. Pirc, the investor advisory group, is concerned about multiple chairmanships and Brydon's ability to do both jobs, and is urging shareholders to vote against his appointment. Serial boardroom director Sir John Peace, who chaired three FTSE 100 firms – fashion house Burberry, Standard Chartered bank and credit-checking company Experian – faced a hat-trick of rebellions in recent meetings.

Greene's pay is likely to be among the biggest issues for Royal Mail's private shareholders at Thursday's meeting in the National Exhibition Centre. The Canadian chief executive collected total pay, bonuses and pension contributions of £1.35m in the last financial year. Her pay would have been higher if it were not for the intervention of the business secretary, Vince Cable, who queried a £250,000 housing allowance, which she handed back.

Despite the reduction, her total pay was still 50 times the average £27,036 collected by her 150,000 staff. The average bonus handed to postal workers was £514 – compared with Greene's long- and short-term bonuses of £873,000.

She was also handed 65,880 bonus shares in the company worth an additional £328,000 at Friday's share price. However, the share award is subject to conditions and will not pay out for three years.

Although she voluntarily repaid her housing allowance, Greene said she was "deeply offended" by the criticism over her pay and benefits.

Brydon has previously described Greene as the worst-paid chief executive in the FTSE 100 and that Royal Mail must improve her remuneration package or risk losing her. "I think it's only fair to pay Moya the right market rate for her job," he has said.

Research by the High Pay Centre put the average total pay of FTSE 100 bosses in 2013 at £4.2m.

Shareholders are also likely to express anger at the company's warning that postal deliveries to rural areas are under threat because rivals are being allowed to cherrypick easy and profitable deliveries in towns and cities without having to run services to homes in isolated areas, such as the isles off Scotland.

Greene issued the warning over the universal service obligation (USO) as the company reported a 12% rise in full-year operating profits to £671m in May.

She said rival TNT Post UK's ability to pick off profitable routes in big cities was "striking at the economics of the universal service obligation".

TNT Post UK has launched "final mile" delivery services in London, Manchester and Liverpool, and plans to deliver to up to 42% of addresses by 2017.

Ofcom, the regulator, said it does not believe the universal service is at risk. It is due to review the service next year, but Labour has called for the regulator to begin the review early and said it will commit to safeguarding the USO if it wins the next election.

Royal Mail will also face a tough time over revelations last week that it could be fined up to £160m over an investigation into "breaches of antitrust laws" by its parcels division GLS in France.

While Royal Mail's big institutional shareholders made substantial profits buying up and immediately selling the company's shares, which soared by 38% on the first day of trading, most of the thousands of private investors have held on to their holdings. The shares, which were floated at 330p and rose to a peak of 615p in January, closed at 471.7p on Friday.

Analysis of trades by stockbroker Peel Hunt suggests that 76% of individual investors still own the 227 shares they bought.

[pants123]

moya greene deserves, the pay package,, she beats, harassed, bullied, overloaded, forced, non payment of overtime, walk at 10 mph on your walk, work faster, make no mistakes, if you do, your down the discipline line, then get fired,,, do the work of 2 humans, she does not care.....

AS LONG AS THE LOVELY MOYA MAKES MONEY FOR THE ELITE... the elite human life forms called share holders...............

the work force will suffer... looking forward to more torture....

i thank you,, have a lovely day.....

[koolishy67]

Labour has called for the regulator to begin the review early and said it will commit to safeguarding the USO if it wins the next election. So we should vote labour??

[Chelseablue]

Feel sorry for the scots,, they detest the self serving millionaire Tories ,yet once again they are lumbered with them . Cameron ,clegg and the other c o ck ,condemning Russia for allegedly shooting down that civilian plane. But,,haven't they been killing working class people for years .

[Ahebban]

How can she be worthy of her current, let alone future, salary if Brydon had his way, when, on their own admission, the business is heading for decline? You only have to look at what happened to the Tesco boss .. if you don't deliver the profits greedy shareholders expect they will demand change and we can then kiss their asses goodbye ...

only to be replaced by even more anti-worker, pro-profit marketeers ...

[wabbithunta]

Ofcom, the regulator, said it does not believe the universal service is at risk. It is due to review the service next year, but Labour has called for the regulator to begin the review early and said it will commit to safeguarding the USO if it wins the next election.

Well that basically says it all then. Next years "review" won't mean a thing and they, Ofcom, will do sod all about it I bet.