Record profits for Royal Mail

A 'FAT CAT' row erupted at Royal Mail today as it emerged that six directors have received £1m pay and bonus packages. The huge sums were revealed as the Government-owned business showed a record profit of £537m for last year - almost £1.5m a day.

The profits triggered huge 'performance-related' bonuses for the board, making them among the best-paid public servants on the government payroll. The payments led to calls for bonuses to be linked to post delivery performance rather than profits.

Highest-paid director was chief executive Adam Crozier, who received a total of £2.55m, including a £177,000 performance bonus and £1.845m under a long-term incentive plan.

The package makes the former FA boss one of the best rewarded business executives in the country, and comes at the end of a year that saw Royal Mail heavily criticised for missing performance targets.

A spokesman for Postwatch, the official watchdog for Royal Mail customers, said: 'In general the public reacts badly to this sort of thing. One can only conclude that the Government did not think that Royal Mail would hit the targets, which is why they agreed to these payments. It does seem an awful lot of money.

'We would like to see a much closer link between bonuses and standards of service. At the moment they are heavily skewed in favour of financial targets.'

Royal Mail directors are set to receive a total of almost £10m for their record-breaking year, including £5.54m under the three-year incentive plan.

The second best-paid director was finance chief Marisa Cassoni, with a total of just under £1.5m. David Mills, who heads Britain's loss-making Post Office network, was awarded £1.33m, while Tony McCarthy, director for people and organisational development, got £1.34m.

Chief information officer David Burden, who joined the board only in July, received just over £1m. The profits also triggered a bonus of £1,074 for each of the 180,000 postal workers, costing £218m.

The State-owned operator also revealed that first-class mail deliveries were the best in a decade, while the number of letters being lost has been cut by half in the past year.

Chairman Allan Leighton said postmen and women had achieved a 'fantastic turnaround' and would now benefit from one of the biggest profit shares with employees in UK corporate history.