Tag: UK

Royal Mail is preparing to sell part of its postal business to its employees in order to ward off what it fears will be a full-scale GBP5 billion privatisation of the industry. Senior Royal Mail executives say that the Government is considering privatisation to boost the public finances and are alarmed that a key government adviser has been in talks with banks. The Times has learnt that Allan Leighton, Royal Mail’s chairman, is preparing plans that would bring in billions of pounds in private cash and give employees shares in the business which would pay dividends. Part of that cash would be made up of bank borrowing, where the level of debt would be greatly increased.

Executives at Royal Mail are deferring or waiving bonus payments, even though the postal organisation has made a profit for the first time in four years.
Chairman Allan Leighton is to defer his entire bonus, worth pounds 144,000, until the group meets quality of service targets in the 2004/5 financial year and if the targets are not reached he will lose his entire bonus. Chief executive Adam Crozier will waive the quality of service element of his bonus which is worth tens of thousands of pounds. Four other executive directors are also waiving the quality of service part of their bonus.

The top directors of Royal Mail received more than pounds 800,000 in bonuses last year even though the organisation missed all 15 of its targets for delivering letters on time, it emerged yesterday. Adam Crozier, the chief executive, earned a pounds 300,000 bonus, taking his total pay to pounds 664,224, while Elmar Toime, the deputy chairman and the executive directly responsible for the disastrous performance of the letters business, earned a pounds 150,000 bonus on top of his pounds 500,000 salary. In total, Royal Mail’s five executive directors were awarded more than pounds 3.6m in salaries, annual bonuses and long-term incentives. The consumer watchdog PostWatch attacked the bonuses at a time when Royal Mail’s performance had “reached the bottom”, while the postal regulatory Postcomm announced an investigation into what it described as a “collapse in quality of service”.