Royal Mail makes Crozier best-paid public servant

The chief executive of Royal Mail has become Britain's best-paid public servant, earning nearly £3m last year, even though the organisation missed its key target for delivering the post on time.

The chief executive of Royal Mail has become Britain's best-paid public servant, earning nearly £3m last year, even though the organisation missed its key target for delivering the post on time.

The pay of Adam Crozier makes him not only the highest-paid director of a state-owned corporation but also one of the best-remunerated businessmen in the country with a package to match that of many FTSE 100 chief executives.

Royal Mail is expected to confirm tomorrow that Mr Crozier earned between £2.5m and £3m in 2004-05 after the company exceeded its financial target by achieving operating profits of about £530m. His pay was boosted massively by a long-term incentive scheme linked to the company's performance over the past three years which is thought to have netted him more than £1m alone.

Postal watchdogs voiced concern yesterday over Mr Crozier's package, saying that it should be more closing aligned to achieving targets for delivering letters on time and less dependent on financial results.

Over the year as a whole, Royal Mail is understood to have missed its key target of delivering 92.5 per cent of first-class letters the next day. But the organisation will argue that, on a running basis, it is now exceeding the target.

A spokesman for Postwatch, the industry's consumer body, said: "It is not for us to say what bonuses should be paid but we do want to see them more closely related to standards of service. Rather than being linked to financial performance, would like to see at least half the bonus linked to meeting delivery targets."

Allan Leighton, the Royal Mail's chairman, defended the payments. "Three years ago, this company was worth zero," he said. "Today it is worth about £5bn and service is the best for 10 years."

Mr Crozier, a Scot, has a habit of taking on some of the hardest jobs around. After an early career in advertising with Saatchi and Saatchi, he was the surprise choice as chief executive of the Football Association in 2000.

One of his earliest moves was to appoint Sven Goran Eriksson as England's first foreign coach. He went on to streamline the FA, replacing its 91-strong board with a 12-member committee, moving its headquarters from Lancaster Gate to new open-plan offices in Soho Square, the heart of London's adland, and reducing the average age of staff from 55 to 32.

He made the FA richer than it had ever been but he also trod on a lot of toes, including those of the former Chelsea chairman, Ken Bates, and finally he lost out in a power struggle with the Premier League.

His arrival at Royal Mail in February 2003 would have been equally surprising but for the fact that he shared a passion for football along with Mr Leighton, a director of Leeds United. Since his arrival, Royal Mail has turned losses of £1.5m a day into profits of £1.5m and shed more than 30,000 staff. The company's financial recovery will also be reflected in a bonus payment to its 200,000 staff worth just over £1,000 per employee.

Mr Leighton is keen to use Royal Mail's improved financial performance to argue the case for an employee buyout of the business which could see 51 per cent of the company owned by the workforce.

The plan would be for Royal Mail to borrow about £2bn on the basis of its strengthened balance sheet. The money would then be used to buy shares from the Government and help plug the £2.5bn deficit in the company's pension scheme.