£2.4m Royal Mail director shares as strikes continue

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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

6 Responses

  1. 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.


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