£2.4m Royal Mail director shares as strikes continue

£2.4m Royal Mail director shares as strikes continue

Having had two days of disruption to the national postal service, Royal Mail workers that belong to the CWU will be out on strike again this Thursday and Friday. In the middle of the strikes, a Royal Mail director shares issue has been announced as part of their long term incentive plan.

Making a purchase, shipped via Royal Mail Tracked 48 service last weekend, it arrived on Saturday – not bad considering Monday was a Bank Holiday and Wednesday was a strike day. This should give some comfort to sellers that the backlog is being processed relatively quickly, but with two consecutive strike days about to hit, anything not posted by this Tuesday on a 24 hour service is very unlikely to arrive with your customers before Saturday at the earliest but more likely early next week.

The dispute the CWU have called this round of strikes concerns pay for Posties. We’re sadly expecting another round of strikes to be announced following the second ballot concerning working terms and conditions.

Knowing that their workers are about to walk out on strike, it’s exceptionally bad timing for Royal Mail to award £2.4m to be split between four of their most senior executives, but that’s what they’ve done. This is a part of the Royal Mail Long Term Incentive Plan and the £2.4m is based on today’s share price which may change significantly by the time the shares are vested… plus as they are performance based there’s no guarantee that the directors will receive them.

Still, the timing is unfortunate for the company as it plays into the CWU’s agenda – They say that Royal Mail is claiming that they can’t afford pay rises for staff unless radical changes are made to make them more competitive, and yet they can afford to promise executives massive bonuses for forcing the changes through.

The Royal Mail director shares awarded are:

  • Chief Risk and Governance Officer Mark Amsden: 114,013
  • CFO Mick Jeavons: 239,361
  • CEO GLS Martin Seidenberg: 288,888
  • CEO Royal Mail Simon Thompson: 299,202

You might think that with strikes it’s questionable as to whether targets will be met for these shares to be awarded, and Royal Mail agree. So instead of setting revenue and profits targets they’re setting them against shareholder returns.

For Royal Mail there is the unknown impact of industrial action due to the ongoing dispute with the
CWU. These exceptional times means that there remains too much uncertainty to make reasonable three-year revenue and profit forecasts to use as the basis for LTIP targets.

Therefore, for 2022 LTIP awards the Committee has agreed that we will not set three-year Royal Mail operating profitand parcel revenue targets, and instead will replace these elements of our performance framework with relative total shareholder return.

– Royal Mail

This Royal Mail director shares award isn’t going to help calm relations with the CWU who are spitting mad.

A day after Royal Mail workers took strike action against savage real-terms pay cuts, those enforcing that pay cut – who have been pleading poverty in the media – award themselves shares worth over £2 million.

There is not a polite word to summarise what unforgivable greed this represents, but it is a perfect example of the moral sickness at the heart of British business today.

– Communication Workers Union
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Very unfortunate announcement which will be used by the CWU to justify more strikes. An own goal for RM. I disagree with industrial action in general because it hurts the public who are the customers of these companies. The postal strikes are very harmful to small firms selling via the Internet and will destroy many of them. This is bad for the country in a very difficult time when rising costs are already causing great hardship. Having said all that, I think the postal workers are a more deserving case than most others as they worked throughout the pandemic and are only being offered 2%. And I say that as a small trader who has pulled down the shutters for the duration of the strike when deliveries can't be guaranteed. I can't face the flack.

Stigmas • 6th September 2022 • Reply to Stigmas

Wjilst I don't agree with you on Posties going on strike, how else are they supposed to try and get a pay rise if Royal Mail won't negotiate, surely there are plenty of other carriers that you could use rather than close up shop. The is a petrol station across ther road from my house that accepts Hermes / Evri parcels and other convenience stores in my small town that accept parcels for other carriers. Yes the cost may be slightly more and admittedly their reputations aren't all good but surely its better to keep going rather than shut up shop.

peter s • 6th September 2022 • Reply to peter s

Peter, you dont seem to understand the extent of the issue. I have clients who rely almost exclusively on large letters for their entire inventory. There is no alternative to this. If they were sent through Evri the items would run at a loss. If the price was increased they wouldnt sell. Posties are costing businesses a lot, I mean a lot of money. There are several of my clients are already talking about shutting up shop. People who rely on a wage often dont get the full picture. While posties are trying to get a marginal wage increase you are costing some their entire business. And what happens when the strikers get their way? most ofyen to pay for the wage increase the costs are passed onto the small buisness with disproportionate invreases in postage - effectivelly reducing the income of the small business owner and accelerating inflation. Workers striking are effectively just making it worse for everyone else and their wage rise will only be canceled out by accelerated inflation.

Alan Paterson • 6th September 2022 • Reply to Alan Paterson

Alan I do not work for Royal Mail, I'm self employed just like I presume you are. I do take your point about large letters though, however is it Royal Mail's fault Evri, etc. don't want to / can't compete on price for this size. As for the posties to quote you and your point about any wage increase being struck out by increased inflation, what you are effectively saying is it's okay for everyone else to get a decent pay rise, including the Royal Mail Management awarding themselves massive dividends. However the ordinary workers who go out and actually do the job should not have a decent pay rise and should be happy to acceot the 2% that Royal Mail have imposed and the changes they supposedly want to make to their working day purely because it's affecting other people's businesses. That is the whole point of a strike it's to try and get the managers back to the table to negotiate because it's affecting their business, what other way is there, stop working overtime? That doesn't work, don't forget they won't be getting paid whilst they are on strike and given the current climate that is not an easy decision to make. They must be really fed up with their bosses imo.

peter s • 9th September 2022 • Reply to peter s

Thanks Peter. There is really no alternative at all for large letter postings. I rely almost 100% on RM. Having traded for many years and experiencing strikes before I find it is better to sit it out rather than fielding queries regarding delivery delays. The backlog for two consecutive strike days this week will be immense. As for couriers such as as Evri, their poor reputation is totally deserved. By the way, I didn't say I was OK with postal workers striking. I am most definitely not. But they have more grounds than say the railway workers who are demanding 15% after taxpayers baled out their industry during the pandemic. I don't want to go back to the 80s.

Stigmas • 6th September 2022 • Reply to Stigmas

That's fair enough, at the end of the day it's your business only you can decide.

peter s • 9th September 2022 • Reply to peter s