Royal Mail chairman steps down after chief executive pay deal row

Shareholders rejected Rico Back's £640,000 salary - He also received close to £6m as a 'golden hello'

Royal Mail said Mr Long had decided it was not possible to continue in his role while also serving as Countrywide’s executive chairman (Reuters)

Royal Mail chairman Peter Long is stepping down with immediate effect to concentrate on his other role at estate agent Countrywide.

The announcement comes after a revolt which saw 70 per cent of the privatised postal service’s voting shareholders reject a pay deal for new chief executive Rico Back.

Royal Mail said Mr Long had decided it was not possible to continue in his role while also serving as Countrywide’s executive chairman. He will be replaced by Royal Mail board member and former Axa Sun Life boss Les Owen.

“Peter has reviewed his board appointments and concluded it is no longer possible for him to remain executive chairman of Countrywide and non-executive chairman of Royal Mail,” the company said in a statement.

His departure comes after Zurich-based chief executive Mr Back’s pay package sparked anger among the companies.

Mr Back is being paid a £640,000 annual salary, £100,000 more than his predecessor, Moya Greene. He also received close to £6m as a “golden hello” when Royal Mail hired him from its European parcels business.

After the payment was revealed, MPs wrote to demand answers as to why Royal Mail had not disclosed it in its remuneration report.

Rachel Reeves, chair of the Business, Energy and Industrial Strategy Committee, said she was “surprised” to learn about the golden hello, which had been buried in the company’s annual accounts.

Royal Mail insisted that it had to pay the sum to end Mr Back’s previous contract early and that his “fixed pay” was the same as his predecessor’s because his pension contribution is lower.

Mr Back has attracted further criticism for his decision to continue living at his home in Switzerland, making regular trips to work at Royal mail’s headquarters in London.

Departing chairman Mr Long ends an three-year stint on the company’s board.

“It is with a heavy heart that I step down from the Royal Mail board,” he said.

“Over my three years as chairman, I have taken great pride in what has been achieved by the group.

“It is a company with an incredible heritage. Operating in a challenging environment, it is positioning itself well for diversified growth under the leadership of Rico Back and his executive team.”