A princely pay packet for RM's new two-day-a-week boss

[Geezer]

By Becky Barrow

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The new chairman of the Royal Mail will be paid £200,000 for working only two days a week, it has been revealed.

Donald Brydon will replace Allan Leighton when he steps down after seven years at the helm of the embattled firm in March.

His new job at the top of one of Britain's most important but most troubled companies is not Mr Brydon's only source of income.

The 63-year-old will remain as chairman of the technology giant Smiths Group where he enjoyed a total pay package of £317,000 last year.

But the Department for Business, Enterprise and Regulatory Reform, which announced the appointment, said he will not get a penny in bonuses.

A spokesman said he will get his basic salary, equal to about £2,000 a day for a two-day week, but no other money apart from expenses.

Mr Leighton's basic salary was only £20,000 but this was supplemented by a performance-related bonus of £180,000 last year.

The decision to block any bonus payments to Mr Brydon follows the annual controversy about the massive payouts to other Royal Mail directors.

Chief executive Adam Crozier is one of Britain's best-paid civil servants after being paid more than £3million last year. At the time, the Liberal Democrats branded his staggering pay package 'absolutely obscene.'

Unions slammed his record-breaking pay day as 'immoral.' His total pay package was £3.04million last year, which is about 180 times more than a typical postman's salary of £17,000.

Mr Brydon becomes chairman of Royal Mail during a momentous year for the state-owned postal operator.

Business Secretary Lord Mandelson sparked a growing Labour rebellion after revealing plans to sell off a large chunk to a foreign bidder.
Royal Mail

Some Labour MPs are furious at Lord Mandelson's plans to part-privatise the Royal Mail

Under the controversial sell-off, a foreign firm could end up owning up to 49 per cent of Royal Mail. The front-runner is the Dutch postal giant TNT.

The move has enraged Labour MPs who say that it is a blatant breach of the 2005 manifesto pledge not to privatise the company.

Mr Brydon today admitted there was 'a big challenge ahead' in his new job but described Royal Mail as 'one of Britain's great organisations.'

'I am honoured to be asked to lead it in the next phase of its continuing modernisation,' he said.

Mr Brydon was educated in Scotland, graduating with an economics degree from the University of Edinburgh.

He got his first job in 1970 at the British Airways Pension Fund before spending much of his career at the investment firm Barclays de Zoete Wedd.

Mr Brydon has been chairman of Smiths Group since 2004. He is also chairman of the London Metal Exchange.

He is married and has two children - one son and one daughter - from his first marriage and has no links with any political party.

The departure of Mr Leighton from Royal Mail is not a surprise. It first emerged in December 2007 and the position was advertised in newspapers by the headhunters Zygos Partnership last year.

Mr Leighton today described his time at the company as 'a privilege' despite a catalogue of problems from strikes to changes to the pension scheme to the closing of thousands of post offices.

When he joined the company, it was losing more than £1million a day. Latest figures show it is now making profits of more than £900,000 a day.

[andy2007]

Well, at least he's working twice as many hours as Leighton did.

[TrueBlueTerrier]

but don't forget that Leightons basic salary was only £70K a year - yet he ended up with £3m last year - on that basis will this new bloke get a £9m pot.

[andy2007]

You know, this reminds me of a video I was shown in a WTLL a while ago. It told us that we were underworked and overpaid. Oooh the irony!

[F0zziebear]

The big consultancies charge about £2000 a day. So in that respect it seems a reasonable price to pay relatively speaking. One could argue that the consultants are not worth £2000 a day.
I am also noticing that pay at the top end of the scale is either stagnating or coming down. See articles regarding Jonathan Ross and Jeremy Clarkson.
As more people are unemployed there is more labour going after jobs. Two consequences of this is being able to find better candidates to fill jobs and also the ability to surpress pay. I expect for the next years at least no major increases in senior management pay, a retrenchment of bonuses. This would indicate that the way above inflation rises in pay in recent years was over-inflated and unsustainable. I expect public sector senior management pay to fall in real terms and move to being more in-line with average public sector pay (though it will still be many multiples).

The conclusion I take from this is that senior management pay was as much a part of the boom 'bubble' as will be the over retrenchment of pay in the 'bust.' Some would argue for a calmer more stable pay over a longer period of time, but human behaviour does not seem to allow for this.

[DGP1]

but don't forget that Leightons basic salary was only £70K a year - yet he ended up with £3m last year - on that basis will this new bloke get a £9m pot.

I thought Leightons salary was £20k per year plus bonuses (last year £180k)

[brothermagrew]

And should it not be Donald Brydon CBE?

[DGP1]

And should it not be Donald Brydon CBE?

With the money he earns he could buy a Lord

[BB brother]

Wheres his hammer smilie then admin? lol
Chuck a tartan on it !
.

[andy2007]

The big consultancies charge about £2000 a day. So in that respect it seems a reasonable price to pay relatively speaking. One could argue that the consultants are not worth £2000 a day.
I am also noticing that pay at the top end of the scale is either stagnating or coming down. See articles regarding Jonathan Ross and Jeremy Clarkson.
As more people are unemployed there is more labour going after jobs. Two consequences of this is being able to find better candidates to fill jobs and also the ability to surpress pay. I expect for the next years at least no major increases in senior management pay, a retrenchment of bonuses. This would indicate that the way above inflation rises in pay in recent years was over-inflated and unsustainable. I expect public sector senior management pay to fall in real terms and move to being more in-line with average public sector pay (though it will still be many multiples).

The conclusion I take from this is that senior management pay was as much a part of the boom 'bubble' as will be the over retrenchment of pay in the 'bust.' Some would argue for a calmer more stable pay over a longer period of time, but human behaviour does not seem to allow for this.

I've no problem with people earning what they're worth. It's the fact that they are being paid to work so few hours. First there was Leighton, who did 1 day a week (while working for half a dozen other Companies at the same time!). Then there was Lord Currie, who does 1 day per fortnight. And finally, there's Brydon, doing a massive 2 days a week! Wow, what a grafter (not!)

A few decades ago, the Unions were criticised for wanting a 3 day week. Yet now, we have people doing far less, for far higher wages. Is it REALLY too much to ask, for people to work a full week?

[F0zziebear]

My understanding is that the role is not considered full-time. I only took someone else's breakdown of his wages into £2k per day, which when compared to a consultant from a top company is the equivalent. I suspect that it's 'the going rate.' The chairman is really there to keep an eye on the chief exec. There is also a board of non-execs. who provide an outside non-attached view on what the company is doing. Its similar to the lords in the sense that they wouldn't set the company strategy, but would suggest amendments and clearly state if they were unhappy with the direction the chief exec. is taking the company in.

Crozier on the other hand does work a full week. The media last year latched onto his £3M pay, but that was the combination of deferred bonuses from previous years. Senior management have a scheme where you can deffer a bonus in one year and get an increased on in further years in the company meets certain targets. Some may argue that they know what is going to happy and will engineer the financial results to get that increased salary, anyway that is slightly off the point.

I think it comes down to a question of whether this new chairman will bring value for money. Can someone say after 1 year that he has done that. For a postman it is slightly easier as delivering the letters to a quality standard is in exchange for their wages. For senior management it is down to growth and profit being delivered on behalf of shareholders.

I think those that see £200k per year for a 2 day week will never see it is as value

[andy2007]

Crozier is indeed a good example. My only complaint with his wages (to date), was when he got the £3 Million, at a time when we were loosing money, and being told to tighten our belts. So I see that (either rightly or wrongly) as a completely different issue. Specifically, the timing of recieving the whole £3 Million.

As for the other two: It's all very well, saying that they are just consultants, and they don't have enough work to justify a full week. But there are plenty of other tasks they can undertake, to fill in the extra hours. I live by the principle of a fair weeks work, for a fair weeks pay. It's not a particularly popular opinion, with some of my Collegues. Because they still want to have their "Flirts", which I don't feel is fair [ducks ready for the backlash!]. But it follows, that we should also be paid fairly for that work. So in the future, we need our wages to match inflation, or they will quickly become unfair, and unjust!

And THAT is the crux of my argument. They are being paid the "going rate". But they are working ludicrously short hours, and that enables them to hold down multiple jobs (if they choose to). Which allows them to get greedy. Now I happen to find that immoral. Whatever happened to loyalty to the service?

I admit that I was being sarcastic, with my reference to the infamous 3 day weeks. But I hope that you can see the point that I'm trying to make.

[F0zziebear]

I do see your point. However to be fair to both Leighton and Brydon the role is advertisied as 2-days a week. If it was a full-time role and they were only working 2-days a week then I would be inclined to complain. So I do not believe they have done anything technically wrong. I am not implying they are consultants but comparing what they get paid per day (when annual salary is broken down) with a typical consultant for a top consultancy (they get paid than that at the top end!)

As for Crozier, yes the timing was poor and the terms of meeting those bonus payments should be called into question.

As for wages keeping up with inflation. I suspect that in 2009 inflation will be 0% or possibly negative. Now even though the likes of British gas have reduced their prices by 10% that is a reduction from a 30% hike previously so its a misleading statement. This is where natioally agreed pay rises help. IN boom times you lose out as private sector (esp. at the top) goes up ahead of inflation, but during recession their pay either stagnates or reduces, e.g. car manufacturers, bankers get laid off. I am not concretely saying that it is completely comparable, but as postmen your positions are relatively safe during the slump as your salary is 100% gauranteed. Say an estate agent has a low basic £11k and gets comission on top, well at the moment you can see they will be earning much less than before and if they do not have savings then they will be in serious trouble. Have I convinced you?

[andy2007]

I didn't know that the posts were advertised as being so few hours. I thought that they had gone to their preferred candidates, and "Head Hunted" them. So I've been directing my disgust at the wrong people. Sorry. But that doesn't make these contracts right. It just means that RM had decided from the outset, to (in my opinion) waste resources. Because if someone is good enough to justify those kind of wages, we should be making better use of their talents.

I do realise that our wages are more secure than a lot in the Private Sector, and that not all prices stay in line with the official inflation figures. But the point I was trying to make, is that we get paid well for what we do. I just want it to stay that way. It's nice to end up better off. But I've little interest in aiming for that. So if inflation was to reach 10% one year, I'd want that as our pay rise. If inflation was 0%, then a pay freeze would be in order.

You have convinced me that it's not the fault of the people taking these highly paid jobs, without working a full week. But I still believe that it is rediculous for such posts to exist. They should be full time, so that we can make proper use of these people's talents. More importantly: It would better motivate them, as if you can work for multiple Companies, you don't have "all your eggs in one basket". So if one of them gets into difficulty. And you have other highly paid jobs to fall back on, you've far less to loose. But if your nice house, privilaged lifestyle, fancy car, etc., was dependant on only one source. It would be a powerful incentive, to fight tooth and nail, to protect that Business.