£1M for new Royal Mail chief

The new chief executive at Royal Mail, the post office group, is to be offered a pay package that could hit Pounds 1m a year.

Three candidates have been short-listed for the top job and a final decision could be made public by the end of this week. Two of the candidates are known to be Alan Jones, the straight-talking managing director of TNT Express, the delivery group, and Adam Crozier, former chief executive of the Football Association. The identity of the third businessman has remained confidential.

The basic salary will be more than Pounds 500,000, but the successful candidate will then have a bonus and long-term incentive plan. While the three-year targets of returning the company to profitability are demanding, it is believed they are achievable.

A Royal Mail board meeting is being held on Tuesday when the appointment will be discussed. Allan Leighton, the group’s chairman, will make his recommendation to the Department of Trade and Industry and it will then have to be sanctioned by the prime minister’s office.

One of the responsibilities for the incoming chief executive will be to continue driving down costs in the post office group. This will result in additional redundancies. Thousands have already been made redundant in the past six months.

The size of the chief executive’s pay package is likely to anger union leaders, who have seen salaries for new directors at the company virtually double since Leighton arrived. Government ministers have accepted that if Leighton is to bring in experienced businessmen he needs to provide a pay structure similar to the private sector.

John Roberts, the group’s current chief executive, steps down from his post this week.