Royal Mail share price declines amid CEO pay raise speculation
Royal Mail (LON:RMG) is considering increasing the remuneration of its chief executive, Moya Greene, for the first time since she joined the postal services group in 2010, Sky News has reported. Inside sources have suggested that formal consultations with leading shareholders, including the British government, which holds a 30 percent stake in Royal Mail, are still to take place. It is “likely”, however, that Greene would be awarded a five percent increase to her £498,000 base salary.
The raise would be lower than a nine percent three-year pay deal for staff agreed between Royal Mail and the Communication Workers’ Union in December 2013, just three months after the company’s controversial £3.3 billion privatisation.That agreement was designed to provide stability for industrial relations at Royal Mail.
Insiders further revealed to Sky News that it was unclear whether Royal Mail would seek the consent of the government on the pay raise, although the directors of the company were determined to ward off any resistance that might keep the compensation of its CEO at current levels for the fifth consecutive year. Donald Brydon, who is to step down as Royal Mail’s chair later this year, has previously said that Greene’s status as “the lowest-paid chief executive in the FTSE-100” meant there was a greater risk of losing her. Greene is widely credited with transforming the postal firm from a loss-maker into a profitable blue-chip company, via cost cuts and a push towards a bigger slice of the fast-growing parcels market.
Greene’s pay raise is expected ahead of the publication of Royal Mail’s annual report, due to be released in June. When contacted by Reuters for confirmation of Sky News’ report, the company said that it did not comment on speculation.
Royal Mail’share price opened almost one percent lower today. The stock ended yesterday’s trading session 1.45 percent higher at 448.00p, after takeover activity in the sector underpinned the value in the company’s European parcel delivery operations, General Logistic Systems (GLS).
Yesterday’s disclosure of the anticipated takeover of Europe-focused express parcel delivery service TNT Express by US rival FedEx proved the underlying value in Royal Mail’s GLS business. FedEx has agreed to pay €4.4 billion (£3.2 billion), a 33 percent premium to the previous day’s closing price of TNT Express shares and representing about 20 times the forecast earnings at TNT Express.There are no signs that any bids are imminent for Royal Mail’s GLS business, and even if there were, it would be unlikely to be sold. But the FedEx deal does demonstrate that the European postal market is seen as attractive.
As of 08:29 BST, Wednesday, 08 April, Royal Mail share price is 448.00p.