A ray of hope seems to have finally descended on Royal Mail, which revealed an encouraging profit figure of £537 million this year, which also meant that the company’s 180,000 postal workers would receive a bonus each, of about £1,074.
Royal Mail’s Chairman, Allan Leighton, said that the mail operator had improved drastically over the years and the number of letters lost in transit had reduced by 50%. He added that postal workers ought to benefit from "one of the biggest profit shares with employees in UK corporate history".
The bonus of every worker of £1,074 would amount to £218m of Royal Mail’s profits.
The performance of the group showed an exceptional rise of about 144 % against the £220m profit recorded last year to March 2004. Meanwhile, Leighton dismissed all tales floating around concerning the hefty salaries earned by the company’s directors. Royal Mail’s annual report had revealed that the chief executive of the group, Scot Adam Crozier, was receiving a salary of £2.55m along with an added long-term bonus of £1.85m, ever since February 2003 when he joined the group.
Furthermore, finance director of Royal Mail, Marisa Cassoni, seemed to be making £1.49m after joining in February 2001, with an incentive of £1.07m. Likewise, chief executive of the Post Office, David Mills, was apparently earning £1.33m plus a £948,000 bonus.
Leighton defended the directors saying that they had joined the business in rough times when the group was incurring a loss of £1m each day. He stated clearly, “In my mind, in any [corporate] transformation I was involved in my life, if anybody deserved the money it’s this group. Fact. I’m very robust about it.” He added that the incentives of the last few years had candidly been mentioned in the books of accounts.
As Royal Mail’s profits leapt 70.8 per cent to reach £591m, the Post Office network’s losses conversely increased to £110,000 as compared to £103,000 last year. Leighton therefore, warned that there still wasn’t enough room for complacency and the three-year renewal program was not over. He notified that Royal Mail would be facing fierce competition in the coming years as the postal market in the country was going to be challenged openly, since the public could start an alternative mail service for posting letters in the country.
He also brought to notice the huge £4.4 billion pension deficit of the group that had to be solved soon to prevent technical insolvency. In his words, “Competing successfully in an open mail market is going to be even more difficult. We’ve a mountain to climb and we’ve only reached base camp.”
Leighton has asked the government to fund at least half of the pension deficit amount, i.e. about £2bn, to aid the group cork the shortfall and invest in further automation.
Posted
on : Wed, 18 May 2005 17:00 GMT | Business News
By : Paula Jenkins
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