Vince Cable faces political battering as Royal Mail mulls Moya Greene pay rise
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Monday 20 January 2014
Vince Cable was potentially heading towards another political battering over the flotation of Royal Mail today as the chairman said it should give its chief executive a pay rise beyond her present £1.25 million package.
Donald Brydon said because Moya Greene’s deal was negotiated under a "overnment-controlled pay structure" it was artificially low compared with other Footsie bosses. Now the business is a FTSE 100 company, it must pay her significantly more or risk losing her, he said.
However, Cable, who as Business Secretary already faced accusations of botching the privatisation by selling the postal service too cheaply, has been vocal in his criticisms of City bonus culture.
As the taxpayer, represented by Cable, is still by far the biggest shareholder, it will be up to Cable whether to approve the recommendations of the Royal Mail’s remuneration committee on Greene’s pay. If he were to approve an inflation-busting package far north of £1.25 million, he would face bruising criticisms.
Unite union’s national officer, Ian Tonks said: "Calls to boost Moya Greene’s huge salary even further is proof the rushed privatisation of Royal Mail is descending into a farce. The Government should step in and make clear it opposes this sort of corporate greed."
Given Brydon is on the remuneration committee, led by former McKinsey partner Orna Ni-Chionna, his comments were taken as a clear sign that a big pay rise for Greene, pictured, is likely.
Sources at the Department for Business, Innovation and Skills pointed that Cable had been consistent in calling for bonuses to be based on long-term performance. The board could, therefore, head off some of the embarrassment for him by creating unusually lengthy performance criteria.
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