CWU calls for government to tackle Royal Mail executive pay

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Royal Mail has defended its senior pay policy after the Communication Workers Union (CWU) criticised the growing gulf between executive and staff rewards evident in the group’s annual report.

The report revealed that former chief executive Adam Crozier pocketed more than £3.5 million in salary, benefits, bonuses and pension entitlements in his final year at the organisation before leaving to join ITV in March 2010.

Royal Mail finance director Ian Duncan was paid almost £1.4 million, while letters managing director Mark Higson took home £1.7 million.

Fresh from a meeting with new business secretary Vince Cable last week, Dave Ward, CWU deputy general secretary, told PM that he had called for a better ratio of senior pay to average workforce earnings, and more transparency about performance-linked executive rewards.

“Whilst the union is opposed to the levels of pay of Royal Mail senior executives, this is not personal,” Ward explained.

“We genuinely believe this is a barrier to building proper employee engagement, if there is such a huge disparity of pay between senior executives and the workforce. The gap is too big for a company that is meant to deliver a public service.”

But Jon Millidge, the group’s acting HR director, said it was important to pitch pay levels at a market rate across the organisation.

“The company is always mindful about what it pays people at all levels – we are in a competitive market and that is where we have to position ourselves,” he said. “When recruiting we’ve got to be able to pay market rates.”

The salary of Royal Mail’s new chief executive, Moya Greene, who joins the company in July, has not been disclosed.

But the CWU has broadly welcomed the appointment of Greene from her public and postal service background at Canada Post, saying it looks forward to fostering a “constructive working relationship”.

Ward said that the CWU remains opposed to government plans to part-privatise Royal Mail as outlined in the new postal services bill, designed to generate a cash injection to tackle the historical pensions deficit.

“We don’t believe privatisation is necessary to run Royal Mail - we value it as a public service and believe it can be successful in public hands,” said Ward.

“But we have always called for solutions for the pensions deficit and competition issue. These issues need to be addressed, and we want dialogue with the government in order to influence that.”

Ward added that he was concerned any new government proposals could “undermine” the modernisation agreement currently being implemented. The plan to phase in new technology to make the service more efficient was negotiated last year alongside a three-year pay deal and shorter working hours for postal workers.

But Millidge was confident that tabled government plans would not interfere with the £2 billion transformation programme.

“Modernisation of the company is pushing ahead at speed and we’re moving through probably the biggest and most exciting transformation that any business in Europe is going through at the moment,” he said.

“We’re doing that with the co-operation and support of trade unions, and I’m confident that’s going to continue and the programme will be deployed successfully.”