Royal Mail has awarded its chief executive Moya Greene an annual pay package of £1.5m, similar to last year, and made some changes to its pay policy for the coming years to satisfy major shareholders.

The company, privatised in two share offerings in 2013 and 2015, has came under fire in recent years for the pay packages handed to Greene, including a 13% rise in total remuneration last year. Its latest annual report (pdf) shows that Greene is being paid £1.529m this year, compared with £1.522m in 2015.

The 500-year-old postal delivery company stressed that last year was the only time Greene’s pay had been increased since she joined in July 2010. In that period, the pay of postmen and women had gone up by 11%.

This year, her salary has risen to £548,000 from £510,0000 while her annual cash bonus has increased to £448,000 from £433,000, and benefits are also up slightly to £31,000. Long-term incentives are down to £302,000 from £350,000 while her pension contributions have remained the same, at £200,000.

After consulting many of its largest investors, the firm concluded that more of its bonus payouts should be in shares and that they should be held for longer by its executives.



Royal Mail introduced a deferred-shares element, which would vest three years after being awarded, and proposed to increase the shareholding guideline for executive directors to 200% of salary. The company has introduced a two-year holding period on shares vesting under the long-term incentive plan, as well as increasing the maximum potential payout from 98% of salary to 100%.

The changes, which have to be approved by shareholders, mean that 40% of executive pay will be in the form of deferred shares, up from 25%.

Three days ago, Royal Mail agreed a one-year pay deal with the Communication Workers Union that, if recommended by its members, would increase workers’ salaries by 1.6%. It remains in a pay dispute with managers, however.

The firm is under huge pressure to cut costs and modernise to grab a larger share of the parcels market while letter volumes are in long-term decline. It has lost some business to Amazon, a key client which recently launched its own delivery service, as well as rivals such as UK Mail which have added extra capacity.

Last month, Royal Mail reported a 33% fall in pretax profits to £267m, including transformation costs and pension charges, for the year to 27 March. Revenues rose 1% to £9.2bn– hailed as a “resilient performance” by Greene.

Orna Ni-Chionna, who chairs the remuneration committee, said the company continued to make progress in several important areas in the last year. “We delivered an increase in adjusted operating profit (before transformation costs), while continuing to manage our ongoing and complex transformation in a rapidly changing industry.” The company “partly met the stretching performance targets” set out in 2013, she said.