Royal Mail bonuses smack of private sector excess

[TrueBlueTerrier]

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2nd August 2013

Moya Greene's package 72 times the average pay of a postal worker
Additional bonus due of £488,000
CWU calls for alternative business model to tackle excess

Responding to the publication of remuneration details for Royal Mail executives today (Friday), the Communication Workers Union criticises the company paying £1.47 million to Chief Executive Moya Greene as "imitating private sector excess".

The report published today shows that Moya Greene took home a total of £1.47m for 2012-13, up more than a third from the previous year when she took home £1.1m. This is 72 times the average wage of postal workers. The report also shows on page 53 that Moya Greene is due an additional £488,000 payment from her long-term scheme in respect of the 2012/13 results. This is a further 24 times a delivery postman or woman's wage taking her total payment for that year to almost 100 times the average postal worker's pay.

Moya Greene and senior executives Mark Higson and Matthew Lester all receive a cash supplement equivalent to 40% of their salary in lieu of pensions. This is at the same time that the company wants to make changes to postal workers' pensions.

The 12 Royal Mail executive directors shared pay and packages totalling £3,753,000 last year.

Dave Ward, CWU deputy general secretary, said: "Ordinary postal workers will be appalled at this excessive, inflation-busting increase in bonuses for Moya Greene. It appears the company is adopting early the private sector penchant for higher prices and massive executive pay and bonuses.

"This executive pay and bonus excess wouldn't happen under our alternative business model, which we believe needs to be looked at more urgently than ever. Excessive executive pay would get worse under privatisation, not better, so we want to see healthy alternatives which keep the company in public ownership. Making Royal Mail a 'not for dividend' company where profits are reinvested back into services would be a better model than old-fashioned privatisation which has lead to soaring prices in other industries.

"These pay and bonus figures make Royal Mail's below-inflation pay offer look even more insulting than it was originally. The management are clearly out of touch with not only their own workforce but also with public opinion. Front-line workers are being squeezed everywhere with inflation and living costs overtaking the value of their pay. But those in the ivory towers of board level continue to award themselves eye-watering sums of cash. Government should act to curb this blatant hypocrisy on pay."


Alternative business model

CWU believes an alternative to privatisation must be considered by government. At this week's CWU policy forum, CWU reps agreed the following principles for an alternative model:

The Royal Mail Group should be a 'not for dividend company' with profits reinvested back into services and the workforce. It would operate for public good, balancing its social obligations with commercial opportunities.

The company would be able to access capital by borrowing on the commercial markets without this contributing to Government debt. Network Rail is a perfect example of this. By creating a new Board structure it has been able to borrow over £27 billion in recent years. A fully modernised Royal Mail with proper employee alignment will also be able to self finance some of its own investment. Neither the Government nor the company can put forward any rational argument as to why this type of structure could not access capital.

There would be a company charter set out in legislation that would confirm Royal Mail as the USO provider and act as a locking mechanism against any further attempts to alter the structure of the company. The charter would set out a list of ethical principles and values that the company would be bound by, including its approach to employee and industrial relations.

There would be an overhaul of the governance structure and the main Board representatives would be balanced between appointees with social, commercial and ethical responsibilities. The Unions could nominate a small number of Board members, but not from within their organisations.

The company would implement the High Pay Commission recommendations with a fixed pay differential between what Board members, Senior managers and the workforce earn.

The company would operate single status benefits from the top to the bottom. Incentive schemes would relate to a fixed percentage of people's overall salary

[borders]

the Capitalist's are all patting each other on their backs , not looking for an alternative business model. works well for them. meanwhile the silence from the Labour party is deafening .

[pants123]

THING IS THESE PEOPLE ARE ONLY HUMAN BEINGS, ALL THAT MONEY IS NO GOOD TO THEM WHEN THEY ARE IN A BOX SIX FEET UNDER..

[Brain Fury]

Can't believe that Dave Ward expects to be taken seriously if the best example of his proposed "alternative business model" is Network Rail. A company that has no competitors and debts guaranteed by Government. I can really see the current (or any) Government falling over themselves to adopt that idea.

Personally I think the CWU realise that privatisation is inevitable and are really just focussed on leveraging the best deal for their members.

[k979aaa]

She is worth every penny. For a start, on the P739 card she got them to put parcel instead of packet, or was it packet instead of parcel? Then she whacked up the price of stamps to help drive letter volumes down. Next they doubled the cost of packets or parcels, whatever we have to call them to wind up small businesses. All these are one off measures to increase profits and make her look wonderful. I could have done that and I already live here and have a house.

Don't say you have a house she will have that after all they have had the shirts of our backs!.

[pinstripe]

Does she do lapsing? Do they lapse one of the Directors positions during the summer, and they all pick up the slack?

[Red Robbo]

the Capitalist's are all patting each other on their backs , not looking for an alternative business model. works well for them. meanwhile the silence from the Labour party is deafening .

Yeah,silence from the same party who when in government tried to privatise Royal Mail but ran out of time, I would not trust any of them !

[k979aaa]

Does she do lapsing? Do they lapse one of the Directors positions during the summer, and they all pick up the slack?

Oh you mean taking on extra houses yes she does at our expense!.

[borders]

Can't believe that Dave Ward expects to be taken seriously if the best example of his proposed "alternative business model" is Network Rail. A company that has no competitors and debts guaranteed by Government. I can really see the current (or any) Government falling over themselves to adopt that idea.

Personally I think the CWU realise that privatisation is inevitable and are really just focussed on leveraging the best deal for their members.

Agree Brian , what alternative is there for the Union in a system where the 3 main political parties do not other any real alternatives.

[DirtyHarry]

Does she do lapsing? Do they lapse one of the Directors positions during the summer, and they all pick up the slack?

She does fark-all. Without us, there would be no postal service worth spit.

Without her, nobody would notice she was gone.

[teesdale]

I've been waiting ages for this alternative business model to be proposed, and I like it.

[Brain Fury]

She is worth every penny. For a start, on the P739 card she got them to put parcel instead of packet, or was it packet instead of parcel? Then she whacked up the price of stamps to help drive letter volumes down. Next they doubled the cost of packets or parcels, whatever we have to call them to wind up small businesses. All these are one off measures to increase profits and make her look wonderful. I could have done that and I already live here and have a house.

Would you have preferred RM to carry on making losses?

I agree that there have been some measures designed to boost the balance sheet but what would be the point of them all being "one off". Do you think any potential investor would be stupid enough to put money into a company that didn't have a viable future business model? IMO Moya did well to obtain the regulatory freedom to allow us to increase prices so that we now make money on our operations. Of course many of those freedoms were granted on the basis of the company being privatised and should it not go ahead we can expect the controls to be reintroduced. I realise it's not a popular view but I'd take Moya as CEO over all of the previous incumbents in my time.

[Brain Fury]

I've been waiting ages for this alternative business model to be proposed, and I like it.

So how would it work, bearing in mind the proposal isn't for some utopian workers collective and what would the benefits be over an IPO?

[k979aaa]

I've been waiting ages for this alternative business model to be proposed, and I like it.

So how would it work, bearing in mind the proposal isn't for some utopian workers collective and what would the benefits be over an IPO?

IPO'S are dividend based ie the take money out of the business with a collective we will ensure we can provide a service to all whilst reinvesting in providing that service! I have asked the clowns at royalmail sent to us and they said they have no idea how they would replace all the vans PDA's come end of life that the government gave them 1 billion pounds for! It beggars belief we are run by imbeciles but we are they must do these tasks set by moya with crayons and string and say I am a god it is no wonder our country has gone to the dogs of capitalism.

[UnhappyGremlin]

She is worth every penny. For a start, on the P739 card she got them to put parcel instead of packet, or was it packet instead of parcel? Then she whacked up the price of stamps to help drive letter volumes down. Next they doubled the cost of packets or parcels, whatever we have to call them to wind up small businesses. All these are one off measures to increase profits and make her look wonderful. I could have done that and I already live here and have a house.

Would you have preferred RM to carry on making losses?

Seeing as the vast majority of those losses were bullshit, clever accounting, yes.
The company has never made that much of a loss, the books have shown what RM wanted them to show.
Masses of equipment were purchased all in one year ( I think 2011 - but not sure) and stockpiled for future use, like PDA's and Vans etc. etc., and that year we made a 'loss' of hundreds of millions. But the assets were sat waiting to be used.
It's like the year RM made it's first major loss, I think about £587m, they banged on about it in WTLL, the look on my bosses face when I pointed out we hadn't lost a bean and it was clever accounting was ace, he said we'd definitely lost money, and we'd go bankrupt soon. That was the year RM bought a German company for £1bn. So, while technically a loss, it really wasn't, it was an investment. Had they not bought it, it would have been a £413m profit.

And even if the losses were genuine, I'd rather stay in Government ownership, as it would give us more security.

Let's say those losses are genuine, they are all aimed at making the company viable for sale, as most of the real necessary expenditure required for investment in the company has already been made, meaning any new owner won't be required to invest heavily in us, merely asset strip and attack our pay/pensions, reduce service, cut jobs, basically just profiteer/maximise profits to their hearts content. At ours and the publics expense.