Royal MailThe head of the Royal Mail has described pay-setting in Government-backed companies as "hopelessly broken".

Chief executive Moya Greene, who received almost £1.5 million in pay and benefits in the last financial year, said she had been "deeply offended" by criticism of her pay and benefits.


In an email to a member of the public who voiced concern about a £250,000 housing allowance she was offered - and subsequently paid back - Ms Greene said she was unimpressed with the amount of time it had taken ministers and civil servants to settle her pay after she moved from her native Canada to take up the job in 2010.

"I took on a company in grave difficulty," she wrote. "I was here for a full 15 months before officials and/or ministers deigned to explain the exact basis upon which i would be paid. I had long resigned my previous position."

The practice for setting compensation arrangements for chief executives in commercial companies involving Government shareholding was "hopelessly broken here", said the email, which was passed to the Guardian newspaper.

Ms Greene said the climate for executives and their ability to manage in the UK remained "highly politicised", aggravated by a press whose general traits have been "well set out" by Mr Justice Leveson.

She defended her record, saying Royal Mail was stable, offering 150,000 people good jobs with salaries and benefits "far superior" to elsewhere in the industry.

The Communication Workers Union (CWU) said earlier this month that postal workers would be "appalled" at the "excessive, inflation-busting increase" in bonuses for Ms Greene.

"It appears the company is adopting early the private sector penchant for higher prices and massive executive pay and bonuses," said deputy general secretary Dave Ward.

The union is threatening to hold a strike ballot in the coming weeks unless a deal can be reached on pay, jobs, pensions and other issues linked to the Government's controversial plans to privatise the Royal Mail.

Royal Mail said in a statement: "We do not comment on individual correspondence. Royal Mail has enjoyed tremendous support from Government on many issues, not least the passage of the Postal Services Act which allowed for the implementation of a new regulatory framework, securing the pension transfer and the separation of the Post Office from Royal Mail.

"We are very grateful to ministers and their colleagues for their past support and continued
assistance and counsel.

"The remuneration committee appreciates that executive remuneration is a sensitive subject in the current economic environment. Under Moya Greene's leadership, Royal Mail has been transformed. In 2010/11 Royal Mail was balance sheet insolvent with negative cash flows.

"The company also had going concern issues. For 2012/13, the group reported positive free cash flow of £334 million. Our core UK business has moved from being loss-making three years ago (minus £120 million in 2010/11 to £331 million in 2012/13) to being the single biggest profit contributor to the group.

"In the exceptional circumstances of the chief executive's relocation and commitment to the UK, additional assistance, on the purchase of a home, was offered given the difference in residential costs between the UK and Canada.

"The remuneration committee, consisting of all non-executive directors at the time, determined that a single payment should be made to the chief executive, rather than an annual allowance. The additional assistance amounted to £120,000 after tax.

"The chief executive was not involved in the decision and has voluntarily offered to return this assistance.

"The remuneration committee has accepted this offer and is arranging the process for repayment. It will also determine the process for the reimbursement of the company of any unrealised gain to date associated with this payment."