Royal Mail

Ticker RMG

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As of 15:46 16 Jun 2019
Market cap. Pound sterling
1,999.42 million
As of 15:46 16 Jun 2019

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Royal Mail says 'lessons learnt' after pay row


Royal Mail endured a rebellion against executive pay at last year's annual general meeting when 70% of shareholders failed to back its pay report.

Its annual report for this year contains a promise from the new chairman Les Owen that "lessons have been learned".

There are no bonuses for the board, including chief executive Rico Back - who took over in June. He received £647,000 for the 10 months to the end of March.

The ratio of his pay to staff was 26 to 1, as shown in the table above.

The company said; "We believe that the [chief executive] to median pay ratio at target of 57:1 is appropriate in our business, assuming good business performance. As business performance has been challenging in the 2018-19 year, no bonus was paid and so the pay ratio was lower, at 26:1. We believe that it is appropriate for our CEO, and other senior executives, to have a far higher proportion of their remuneration at risk, compared to our operational colleagues".

Unite presses the case for Royal Mail managers

Royal Mail sign
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The Unite union is concerned that Royal Mail manager roles may be headed for a cull after the firm announced a £1.8bn turnaround plan over the next five years this week.

The union represents 6,000 Royal Mail managers.

Unite national officer Louisa Bull said the announcement "brings more questions around more potential headcount reductions."

"We are seeking reassurances around the long term job security of our members, so that we can enter into this next phase with a measure of stability amongst the manager population," she said.

She added that changes to the Royal Mail pension scheme and the recent loss of 400 jobs "has led to a very unstable period and morale amongst the membership is at an unprecedented low."

Delivery announcement boosts Royal Mail shares

Shares in Royal Mail are up almost 5%, presumably due to investors welcoming the introduction of a second daily delivery of parcels.

The stock price was down earlier, after the company warned it would pay a much smaller dividend to boost its "turnaround" plans for its UK operations.

Chief executive Rico Back said the decision "is not one that we have taken lightly".

Royal Mail to introduce second parcel delivery

Royal Mail sorting office
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Royal Mail has said it will introduce a second daily delivery of parcels, to be fully operational by 2023.

"This second delivery will consist of next day parcels, typically purchased online from retailers the evening before, and larger items more appropriate for van delivery. In many cases, the delivery will be less than 24 hours after the order is made," it said in a statement.

Royal Mail's parcels volume has been going up for a number of years as more people shop online, while letters have been declining as more people communicate online.

European parcels boost profits at Royal Mail

Royal Mail
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Pre-tax profits at the privatised Royal Mail rose in the year to March, to £241m, from £212m the year before.

However revenues at the UK postage arm were flat, with growth coming from the company's European parcel arm, GLS