Royal Mail in bid to placate shareholders over boss Rico Back’s pay packet
Royal Mail has been sounding out investors over plans to change its chief executive’s pay packet.
The company has spoken to large and small shareholders over arrangements for Rico Back’s annual pay that will put more of an emphasis on long-term payouts.
These talks are an attempt to appease investors after the postal service was hit with one of the biggest pay revolts in UK corporate history last year, when an unprecedented 70 per cent refused to support its bosses’ pay package.
Bonus row: An unprecedented 70 per cent of Royal Mail shareholders refused to support boss Rico Back’s pay package
A source told the Mail the proposals would cut Back’s maximum cash bonus from 200 per cent of his salary to 150 per cent.
The company will increase his long-term bonus, which is awarded in shares and linked to long-running performance measures, from 100 per cent to 150 per cent of his salary.
The changes would mean the highest take-home cash bonus he could receive in a given year would be £960,000, rather than £1.3million.
The industry source said shareholders have generally been receptive to the plans.
But it is unclear whether the shake-up will be enough to satisfy investors who are angry about payouts to top staff despite a torrid share price performance.
The company floated at 330p per share in 2013. But it has plunged and hit record lows of 234p per share this year.
Back, 65, took the top job at Royal Mail last June and the 503-year-old firm was slammed for paying him £5.8million to buy out his contract from his previous job leading the postal firm’s European parcels unit, General Logistics Systems.
He will pocket a basic pay, pension and benefits package worth £790,000 on a salary of £640,000.
A Royal Mail spokesman said: ‘We have held constructive meetings with a number of our shareholders.’