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[March 23, 2014]
Cable intervenes to restrict Royal Mail chief executive's pay rise to 3%
(Guardian (UK) Via Acquire Media NewsEdge) Vince Cable is trying to limit a pay rise for Moya Greene, the chief executive of the newly-privatised Royal Mail, to 3% - the same level that will be enjoyed by the rest of the company's staff, it was claimed at the weekend.
The business secretary has told the board that anything over that level could prompt the government, which remains a 30% shareholder, to vote against the rise at the annual general meeting in July.
Cable has clashed with Greene in the past over a pounds 250,000 relocation payment and the Royal Mail boss described pay-setting in government-backed companies as "hopelessly broken" in a private email last year.
And Donald Brydon, the chairman of the Royal Mail, said earlier this year that a pay rise for Greene, who has been earning up to pounds 1.5m annually through salary and performance-related bonuses, was a "necessary part of making sure we keep her." Cable has championed a crackdown on executive pay but has also been on the defensive since the government was hammered by critics for selling a significant part of the business for 330p per share when they soon after raced to 600p.
According to Sky News, Cable's Department of Business has informed other directors of the postal delivery company that he does not want Greene awarded a pay rise higher than the wider workforce even though she has not had a rise since 2010 and is paid less than her predecessor, Adam Crozier.
A Department for Business spokeswoman declined to comment last night on the reports saying it would wait and see what the board proposed before taking a definite decision.
She added: "Royal Mail has yet to put remuneration proposals to its shareholders including the government which remains the company's largest shareholder. We will of course discuss proposals with their remuneration committee to understand their thinking behind any changes. We have a vote at the AGM and will decide how to exercise that vote." The threat to vote against a larger pay rise is a significant one as Cable has introduced new regulations to tighten up corporate governance in the business world, which allows a majority of shareholders under some circumstances to throw out what they deem to be over-generous awards.
But other City investors may think that Greene deserves an increase, not least because the Canadian-born executive is the lowest paid boss of a FTSE-100 company, according to Brydon.
Captions: The government may vote against any rise of over 3% for Moya Greene, above (c) 2014 Guardian Newspapers Limited.
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