Royal Mail chief in talks to put stamp on exit plan

The chief executive of Royal Mail is in advanced talks to leave the company just weeks after his credibility was questioned by MPs investigating the performance of the former state-owned monopoly.

Sky News has learnt that the board of International Distributions Services (IDS), Royal Mail’s London-listed owner, could announce as soon as this week that Simon Thompson is to step down.

City sources said that Mr Thompson had become increasingly disillusioned about the job in recent weeks amid a bitter fight with union bosses over the company’s future.

An industry source said that some board members had also concluded that the business requires fresh leadership after a turbulent period.

One insider said on Monday that key details of his exit had yet to be finalised, suggesting that a formal statement could yet be delayed beyond this week.

The person added, however, that an announcement was “likely” to be made before IDS reports annual results on 18 May.

If confirmed, it would bring a largely unhappy tenure, which began just over two years ago, to an end.

Mr Thompson initially joined the IDS board as a non-executive director in November 2017, having had spells as an executive at companies including Lastminute.com, Honda, HSBC, Motorola and Wm Morrison, the supermarket chain.

Please use Chrome browser for a more accessible video player

His most recent role was at Ocado, the online grocer.

He has come under fire from all quarters in the last few months, with MPs on the business select committee forcing him to give evidence for a second time after accusing him of misleading them at a hearing in January.

The committee’s chairman, Labour MP Darren Jones, said failures in company policy relating to working conditions and the monitoring of postal staff “can only be due to either an unacceptable level of incompetence or an unacceptable level of cluelessness about what is happening at Royal Mail”.

Be the first to get Breaking News

Install the Sky News app for free

IDS announced last month that it had reached an agreement with the Communication Workers Union (CWU) after protracted negotiations which had featured suggestions that Royal Mail could be placed into administration without a deal.

The company has a workforce of about 140,000 people, making it one of Britain’s biggest private sector employers.

The deal with the CWU includes a 10% pay rise over three years and a £500 lump sum for eligible Royal Mail and Parcelforce staff.

A profit-share scheme would also entitle workers to 20% of Royal Mail’s earnings if it succeeds in turning around its performance during the term of the agreement.

In return, the company plans to overhaul working practices, including requiring regular Sunday working and new seasonal working patterns.

A ballot of CWU members opens on 17 May, and is due to close on 7 June.

Executives have consistently warned in recent years that Royal Mail’s universal service obligation (USO), which is overseen by Ofcom and requires the company to deliver mail to every UK address for the price of a stamp, has become increasingly unsustainable in the face of new competition.

It is unclear whether the company, which is chaired by the former British Airways chief Keith Williams, has a successor lined up to replace Mr Thompson.

Any payoff for the Royal Mail CEO, who earned just over £750,000 last year, would be highly controversial given the circumstances of his exit.

Royal Mail Group, as the company was called at the time, was privatised by the Conservative-Liberal Democrat coalition government in 2013, with the then business secretary, Sir Vince Cable, saying it was a necessary step to allow it to modernise.

The shares were priced at 330p, and initially soared, reaching a peak of over 500p, prompting accusations that it had been sold too cheaply.

However, its stock has struggled in recent years and on Friday closed at 245.8p – down a quarter over the last 12 months.

A spokesman for IDS refused to comment on Monday.

Read Entire Article