Royal Mail pays old boss £900k to leave & new boss £5.8m ‘Golden Hello’!

MPs have written to the Royal Mail board demanding answers about a £5.8m payout to new chief executive Rico Back after 70 per cent of the privatised company’s shareholders rejected his remuneration.

Rachel Reeves, chair of the Business, Energy and Industrial Strategy Committee, said she was “surprised” to learn about the fee Royal Mail is paying to Mr Back, which was disclosed only as a note on the company’s accounts, not in its remuneration report.

In a letter to Orna Ni-Chionna, chair of Royal Mail’s remuneration committee, Ms Reeves asked why the company was also paying Mr Back 17 per cent more in basic salary than his predecessor Moya Greene.

Royal Mail argued that Ms Greene was paid more in pension contributions so the overall fixed remuneration was the same, but it conceded that Mr Back “could get more overall compensation than Moya, because annual and long-term bonuses are calculated on salary”.

Mr Back’s total remuneration this year could be up to £2.7m, in addition to the £5.8m he is being awarded on joining the company. Ms Greene is pocketing a £900,000 “golden parachute” payment.

Last week, at Royal Mail’s annual general meeting in Sheffield, 70 per cent of shareholders rejected the pay deal.

Responding to the non-binding vote, the board said it would consult further when it reviews its remuneration policy later this year.