I’M WORTH EVERY PENNY

Profits down 57pc Shares hit a record low But Royal Mail boss insists . . .

ROYAL Mail boss Rico Back was forced to defend his bumper pay package as he revealed profits have more than halved at the struggling postal service.

Speaking after grim results sent shares to an all-time low, the 64year-old admitted he was ‘paid well’ but insisted he would deliver value.

His comments came after a row over fat cat pay, with a massive shareholder revolt over the summer triggering the resignation of former chairman Peter Long.

Back (pictured) can earn up to £2.7m a year but is grappling with falling letter volumes, a cost-cutting programme and slow progress on improving productivity, which has eaten into profits.

The German, who was paid a £5.8m ‘golden hello’ when he took over from Moya Greene this year, said: ‘I am committed to doing everything I can for Royal Mail.

‘I have worked for Royal Mail for over 20 years and I think I have done and will do my best.

‘I am honoured, as a non-British person, to lead this company which is more than 500 years old. I know executive pay is a very sensitive subject.

‘I know I’m paid well, but I’m committed to delivering a value increase for Royal Mail.’

The father-of-four has also faced criticism for continuing to live in Switzerland with his family after taking up his post in June.

But he said: ‘My family have lived in Switzerland for more than ten years, my daughter goes to school there and I am paying all my travel and overnight stay expenses from Switzerland over to the UK.

‘I spend the vast majority of my time here in the UK because this is where we have the issues and we have got to fix it. This is my working place.’

However Luke Hildyard of the High Pay Centre said: ‘Rico Back offers conciliatory language on his controversial pay, but isn’t prepared to accept that it should be reduced to fairer or more proportionate levels.

‘It is time companies like Royal Mail took responsibility for the impact their actions have on perceptions of British business.’

Yesterday Back pledged action to boost performance as profits plummeted by 57pc to £33m in the six months to September 23. Shares fell 6.5pc, or 22.6p, to an all-time low of 325.4p, taking losses since May to 49pc.

Back announced a review of the under-pressure UK postal network and said more parcels needed to be sorted by machines. Just 10pc are sorted automatically, compared to a figure of 90pc at similar European services, Back said.

He aims to lift Royal Mail’s figure to at least 30pc in a year.

He added: ‘We have got to become more efficient. If we are not doing that, we cannot keep up with growth.’

Royal Mail still expects to make savings of £100m in the full year, although it had aimed for more.

It came just weeks after Royal Mail issued a profit warning, sending shares plunging.

Back said: ‘There will be a clearer focus on financial performance and management accountability. In short, we as a management team are focused on pulling all the short and medium-term levers at our disposal to improve performance.’

Back will be providing an update in March.