No bonus for Royal Mail’s bosses after dismal year which saw shares crashing 50%
The entire board of Royal Mail has been refused a bonus after a dismal year in which shares fell by more than 50 per cent.
Chief executive Rico Back – dubbed the Flying Postman because he commutes from Switzerland – will not get an annual bonus of up to £1.1million due to the terrible performance.
Back, who lives in a £2.3million penthouse in Zurich, faced outrage, after joining last June, over his £5.8million golden hello.
Royal Mail chief executive Rico Back – dubbed the Flying Postman because he commutes from Switzerland – will not get an annual bonus of up to £1.1m due to the terrible performance
He still trousered £647,000 in salaries and workplace benefits over his first ten months despite losing out on bonus pay because he missed targets.
Orna Ni-Chionna, chairman of the remuneration committee, wrote in the annual report: ‘Shareholders were concerned that since the salary of the incoming chief executive was higher than that of the outgoing chief executive, this would lead to higher potential total pay.’
But she said that Royal Mail has reshuffled its remuneration policy so 75 per cent of bosses’ bonuses would depend on hitting financial targets. The policy will come into force if passed by shareholders next month.
Royal Mail was criticised for paying departing chief executive Moya Greene almost £1m in cash. And Ni-Chionna is leaving having been under fire for holding other boardroom jobs.
Ni-Chionna presided over one of the worst shareholder revolts in corporate history last year, when 70 per cent of investors rebelled over pay. Chairman Peter Long quit soon after.
Last October, the 503-year-old company issued a shock profit warning and said cost-cutting was slower than expected.
It only expects to save £100million this year, down from aims of £230million.
But changes to executive pay might save some cash.
Bosses could previously pocket a maximum 200 per cent of their salary in bonuses but this has now been lowered to 150 per cent.
Hitting target performance also used to win them two-thirds of their maximum bonus, whereas now it will only get them half.