Australia Post has revealed its former chief executive Ahmed Fahour was paid a total of $10.8 million after quitting earlier this year amid political and community uproar about his fat pay deal.

Key points: Mr Fahour was paid $6.8m in 2017, with additional $4m in long-term incentives over 2015-2016

Mr Fahour was paid $6.8m in 2017, with additional $4m in long-term incentives over 2015-2016 Ms Holgate to receive pay deal set at maximum of $2.75m, with fixed base of $1.37m

Ms Holgate to receive pay deal set at maximum of $2.75m, with fixed base of $1.37m Lucrative pay arrangements likely to fuel debate about gender pay gap

In its remuneration report released this morning, Australia Post confirmed Mr Fahour was paid a total $6.8 million in the 2017 financial year, sweetened by an additional $4 million in long-term incentives awarded from 2015 and 2016.

Mr Fahour's $10.8 million parting pay — which includes $1.75 million in superannuation — is well above the $5.6 million estimate circulating in February in the lead-up to his abrupt resignation in the face of criticism.

The bonuses reflect what Australia Post describes as Mr Fahour's "sustained success" in transforming the government agency from a letter delivery business to a parcels and ecommerce business in line with contractual obligations.

However, Mr Fahour's successor Christine Holgate will receive a substantially lighter pay deal set at a maximum of $2.75 million, comprising a fixed base of $1.37 million and a potential short-term bonus capped at a similar level.

Unlike Mr Fahour, Ms Holgate will not be eligible for long-term incentive payments in 2018.

Her pay will now be determined by the Remuneration Tribunal after the Federal Government removed the ability of the Australia Post board to set chief executive pay.

The less lucrative pay arrangements are likely to fuel debate about the gender pay gap.

Data from the Australian Bureau of Statistics shows that on average, male executives are paid 15.3 per cent more than women counterparts in similar roles.

Ms Holgate, who resigned in June as chief executive of the vitamins company Blackmores, begins one of Australia's toughest and highly politicised corporate roles on October 30.

Australia Post chairman John Stanhope defended the board's original stance to align Mr Fahour's pay with commercial competitors in global ecommerce and logistics.

But he acknowledged the community and political concerns that forced the turnaround.

"While community expectations have changed since Mr Fahour's appointment in 2010, it is not practical or possible to retrospectively change our contractual obligations to him," Mr Stanhope said.

When questioned over the issue, Prime Minister Malcolm Turnbull said while he understood it was a decision taken by Australia Post a few years ago, he thought the salary was "too high."

"You won't see its like again at Australia Post," he said.

"We have now made changes to ensure that the Remuneration Tribunal sets the salary of the CEO of Australia Post.

"They do have a new CEO appointed, and her salary is a fraction of what Mr Fahour was paid.

"So look, we've taken steps to ensure that the salary is proportionate to the task at hand."

Does this payment pass the 'pub test'?

Mr Stanhope agreed that today's community expectations had changed in contrast to the expectations in 2010, when Mr Fahrour's contract was initially signed.

"I don't believe that today's community expectations are met by that amount of money," he said.

"But I do honour contractual obligations, and the recognition that I believe that doesn't pass the pub test is what we're doing going forward."

Mr Stanhope said the board at the time had put together a contract aimed at persuading Mr Fahour to come onboard as CEO.

"I understand why they did that, they attracted him and his talent and I maintain that he's done a very good job," he said.

When asked if the board had considered cutting Mr Fahour's bonus, Mr Stanhope said that a board does not have "unfettered discretion."

"But in terms of contractual obligations, if hurdles are set down and conditions of payments are set down as contractually as they were, then we don't have an unfettered discretion to say we're not going to pay you it."

Mr Stanhope said both the Prime Minister and Communications Minister had been briefed about the release.

"Certainly, the Minister of Communications has indicated to the board to take in to account community expectations," he said.

"I said we will, but we also have contractual obligation to the employer."

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Pay deal to overshadow Australia Post's profit rise

Mr Stanhope came under fire in February after the Australia Post board initially refused to fully disclose details of Mr Fahour's pay arrangements.

But after sustained pressure from a Senate committee and public criticism from Prime Minister Malcolm Turnbull and Communications Minister Mitch Fifield, Mr Stanhope agreed to be more transparent about senior executive pay.

"We have aligned our executive remuneration reporting to meet the same standards of transparency and disclosure that you would expect from a listed company of similar size and complexity," Mr Stanhope said.

Senator Fifield faced hostile questioning about why he did not know the specifics of Mr Fahour's multi-million-dollar salary.

The revelations about Mr Fahour's departing pay deal overshadows with Australia Post reporting a full-year after-tax profit of $95 million — $126 million before tax — compared to $36 million in 2016.

Despite profit improvement for the overall agency, letter delivery volumes declined by another 11.8 per cent, contributing to a $180 million loss in Australia Post's traditional letters business.

The organisation's new "bread and butter" focus of parcel deliveries and ecommerce accounted for an almost 5 per cent profit improvement to $299.7 million before tax.

Australia Post's acting chief executive Christine Corbett said the strong result validated the shift from traditional letters to parcels and ecommerce.

"Last Christmas we had our largest ever parcel delivery day with more than two million parcels delivered in a single day," Ms Corbett said.

"With new entrants in the market contributing to overall growth in ecommerce volumes, we expect out parcels business to continue to grow."

Sorry, this video has expired Mr Fahour announced his resignation earlier this year

Mr Fahour announced his resignation from his lucrative seven-year role in February in the wake of criticism about his pay and attempts by the Australia Post board to conceal the details.

"This has been a difficult and emotional decision for me and my family, but I have come to the conclusion that the timing is right," Mr Fahour said at the time.

After leaving Australia Post in July, Mr Fahour was appointed as non-executive chairman for Asia of BCG Digital Ventures, an arm of the Boston Consulting Group where he previously worked for 13 years.

Follow Peter Ryan on Twitter @peter_f_ryan and on his Main Street blog.

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