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Monday, May 16, 2005

"Profits?" "Bonus?" Post Office? Holy Proletariat!

Telegraph | Money | Post workers share in Royal Mail's GBP500m profits

Post workers share in Royal Mail's £500m profits

By Andrew Cave (Filed: 16/05/2005)

More than 190,000 postal workers will tomorrow be awarded windfalls of more than £1,000 each as Royal Mail claims victory in its mission to transform its service and profits.

The special bonuses will be awarded under the terms of a "renewal plan" announced by Allan Leighton when he became chairman three years ago and set a target of achieving operating profits of £400m. At the time, Royal Mail was losing £1.5m a day.

Weekly-paid staff will receive their windfalls at the end of this week, with other employees getting theirs at the end of this month.

Adam Crozier, Royal Mail's chief executive, will emerge as a massive beneficiary of the turnaound, paid more than £2.7m last year partly due to payments under a long-term incentive plan.

Elmar Toime, ousted as executive deputy chairman last October, is thought to have been paid more than £1m in compensation.

The earnings announcement is expected to confirm operating profits of over £500m in the year to the end of March, compared with £220m the previous year.

The Royal Mail will also say that delivery levels in the past three months were the best for a decade.It delivered 92.5pc of first-class mail the day after it was posted in its final quarter.

Allan Leighton said: "Three years ago, this company was worth zero. Now it is worth around £5billion and the quality of service is the best it has been for 10 years.

"This is why the results we are about to announce will trigger a share-in-success payment of more than £200m to our postmen and postwomen."

The results come as speculation intensifies over the Royal Mail's future. Mr Leighton is understood to have told ministers that he wants to borrow more than £2billion from the City to fund a partial privatisation of the Royal Mail.

He is said to want to see a large stake in the business bought on behalf of Royal Mail staff and a new ownership structure modelled on department store partnership John Lewis.

Labour said in its manifesto that it had no plans to privatise the Royal Mail but will launch a review of the effect on the business of next year's liberalisation of Britain's postal market.

Supporters of a partial privatisation believe that setting up an employee share ownership trust to hold Royal Mail stock for the benefit of all its staff would be an effective way of navigating the ownership issue.

© Copyright of Telegraph Group Limited 2005. Terms & Conditions of reading.

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