First-class farce
Royal Mail boss who ran firm from Switzerland quits with £1million payoff (after £6million golden hello)
THE boss of Royal Mail has been ousted with a £1million golden goodbye less than two years after arriving with a controversial £6million golden hello.
Rico Back, 66, was shown the door after a row over his pay and revelations that he has been running the postal service from his luxury penthouse in Switzerland during the coronavirus crisis.
It is understood Mr Back’s dismissal took place over video calling service Skype, which he has been using to communicate with colleagues.
The German father-of-four has presided over fiery disputes with frontline staff and a huge fall in the company’s share price since he took the job.
But despite the controversies, he stands to receive a lucrative exit package worth £1 million.
Mr Back was paid £6million for changes to his contract – branded a ‘golden hello’ by critics – before he replaced Dame Moya Greene as chief executive of Royal Mail in 2018.
Luke Hildyard, of the High Pay Centre, said the arrangements were ‘farcical and a huge embarrassment’ to Royal Mail.
He added: ‘The case highlights how for too many boards, business strategy involves little more than spending obscene sums of money on perceived superstar senior managers and expecting them to work miracles. It would be a better idea to pay executives as the fallible individuals that they are and concentrate on building a committed, motivated workforce.’
Mr Back’s departure yesterday capped a period of turmoil that has seen Royal Mail gripped by an increasingly acrimonious row with postal union chiefs over pay and the company’s modernisation plans.
He was also under fire for cutting the dividend payout to shareholders, in a bid to save cash during the coronavirus crisis, but failing to take a pay cut himself. The issue has been highlighted by the Mail’s Time to End Fat Cat Pay campaign.
On top of this, critics called on him to return to the UK or resign after this newspaper revealed he was running the firm from his £2.3million property overlooking Lake Zurich during lockdown.
Mr Back will be on ‘gardening leave’ for three months and receive full salary and benefits worth £160,000. He will then receive nine monthly payments worth £480,000 – replacing the salary he would have received – as well as £50,000 for legal fees and £25,000 for ‘outplacement support’ to help him get a new job.
And he is in line for share awards, meaning the package could ultimately reach £1million.
Royal Mail declined to comment, but chairman Keith Williams said: ‘On behalf of the board, I would like to extend my thanks to Rico and wish him well in the future.’
Mr Back said: ‘It has been a privilege to lead a company that is so much a part of UK life at this crucial time in its history.’ City & Finance – Page 89 Alex Brummer – Page 91
Royal Mail chief working from Swiss penthouse From the Mail, April 16
Return to UK or quit, Royal Mail boss told The Mail, April 18