New Royal Mail boss Rico Back has joined a litany of fat cat chief executives raking in huge pay packets as their workers struggle to gain modest wage rises.
Reports emerged yesterday (May 16) that Back was handed nearly £6m by the Royal Mail in July last year when the company ended his contract with a Royal Mail subsidiary and replaced it with a new contract as chief executive in what was essentially a contract buy-out.
The ‘secret’ £6m handout came nine months before it was officially announced Back would start as Royal Mail boss in April and is only the beginning of eye-watering sums he will earn leading the company, which was privatised in 2013.
Back’s base salary is £640,000 a year, and he’ll also receive a cash pension allowance of 17.5 per cent of his base salary. This doesn’t include yearly bonuses which can be up to 200 per cent of his annual salary.
Unite national officer Brian Scott slammed the amount Back was paid before even starting his job at the helm of the Royal Mail.
“At a time when the company argues that money is tight and Unite members have to wait an extended period for a pay settlement, it is disappointing that the company can easily find an obscene amount of money to pay an incoming CEO,” he said.
“This smacks of double standards and will only serve to emphasise the gulf between those that actually deliver the results, the workers, and the others that benefit from it outrageously.”
News of Back’s pay – including the £6m for ending his previous contract – comes after CWU and Unite members working for Royal Mail were embroiled in tense talks over pay and pensions this year and last.
Rico Back isn’t the only chief executive who’s come under fire over pay. Last week, Melrose – which successfully took over engineering firm GKN in March after a hostile bid — faced a shareholder revolt over bosses’ bonus schemes, with almost a quarter of shareholders rejecting pay policies that saw four executives share £160m last year.
Other major companies – including outsourcing firm Serco, insurance company Direct Lane, and wealth manager Rathbones, among others – faced shareholder rebellions over executive pay last week, with a significant percentage of investors voting down pay reports.
In their final report of the now defunct outsourcing firm Carillion, MPs this week slammed company bosses, who precipitated the collapse of the firm even as they lavished themselves in bonuses.
“Same old story. Same old greed,” said Work and Pensions Committee chair and Labour MP Frank Field. “A board of directors too busy stuffing their mouths with gold to show any concern for the welfare of their workforce or their pensioners.”