Royal Mail gave a payment of nearly £6m to its new boss to buy him out of his contract. The move, however, has been criticised to be “obscene” by the union of postal workers.
The contract of Rico Back as the chief executive of Royal Mail owned GLS was then terminated in exchange for a payment amounting to €6.6m (£5.8m) and replaced with a new one.
The announcement came only a few months before it was revealed that he would replace Moya Greene as the CEO of the entire Royal Mail group.
Following the report of Sky News regarding the payment on Wednesday evening, Terry Pullinger, the deputy general secretary of the Communications Workers Union, said that it was “not a good start” to the tenure of Back.
He stated: “On a personal level I find these arrangements obscene and it will be interesting the first time Mr Back pleads poverty when we discuss reward for our members or request more investment in growth, clearly Royal Mail have.”
Pullinger added: “It beggars belief that people should be surprised that we are calling for a new deal for workers, a fairer share for all and the re-nationalisation of Royal Mail, it is the people’s service and not a cash cow for the few. Stories like these are unacceptable”.
However, Royal Mail said that it had attempted to replace the original contract in order to remove some certain management control rights that are held by Back, including the veto ability.
In one of its statements that were released by the company, it disclosed: “The Board came to the conclusion that some of the provisions of the original contract were increasingly inappropriate and needed to be removed.”
Royal Mail added that as part of the buyout of the contract, The fixed pay of Back was rebased downwards.