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Royal Mail plc
20 April 2018
MOYA GREENE TO RETIRE FROM ROYAL MAIL GROUP IN SEPTEMBER 2018. RICO BACK WILL BE SUCCESSOR.
The Board of Royal Mail plc (RMG.L, 'the Company') and Moya Greene have agreed that she will retire in September 2018, after more than eight years as Chief Executive Officer ('CEO').
Rico Back will assume the role of Group CEO of the Company and join the Board on 1 June 2018, following the announcement of the 2017-18 Results. His appointment follows a search led by Peter Long in his role as Chair of the Nomination Committee.
Rico has been a senior Royal Mail Group executive and CEO of our major European subsidiary, General Logistics Systems (GLS), for 18 years. He was a founding member of German Parcel in 1989, which Royal Mail acquired in 1999. This business was subsequently rebranded as GLS and under Rico's leadership, it is now the leading ground-based deferred parcel company in continental Europe. Rico has nearly 30 years' experience as a senior executive in the international parcels industry.
Sue Whalley was appointed Chief Operations Officer in 2014 and, subsequently, Managing Director of Royal Mail Letters and Network. She will become Chief Executive Officer of Post and Parcels, Royal Mail UK, which consists of all the revenue and operations in the UK, other than Parcelforce Worldwide and Royal Mail International. Sue will join the Board on 1 June 2018 and will play a key role in representing the Company in the UK. She is a highly experienced executive, and is leading the transformation of Royal Mail's UK operation. She is a former partner at McKinsey & Company, where she advised blue chip companies on strategy, business transformation and stakeholder management.
Moya Greene will step down from the Board on 19 July 2018, the date of the Company's AGM. She will not be standing for re-election at the AGM. She will remain at the Company until 14 September 2018 in order to provide advice and counsel, working closely with Rico to ensure an orderly handover. Following her departure, Moya will pursue a range of other interests, including developing her portfolio career. She is a non-executive at easyJet plc. and a Trustee of Tate. Moya will, as previously announced, become a non-executive director of Rio Tinto in the second half of 2018.
Peter Long, Chairman, said: "Royal Mail was highly fortunate to recruit Moya, given her direct experience, strategic vision, drive and proven track record across a range of industry sectors.
"When Moya joined in the summer of 2010, the Company was balance sheet insolvent. Since then, Royal Mail has been transformed, including our privatisation in 2013 and two significant, ground-breaking agreements with the CWU. Alongside the strong financial position Moya has secured for the Company, we have invested over £1.5 billion in our UK operation in recent years. We are one of the most favourably viewed brands in the UK.
"I would like to extend to Moya our sincere thanks for her tremendous contribution during a defining time for us."
Moya Greene, CEO, said: "It has been my pleasure and a great privilege to serve as CEO of this cherished UK institution. I am proud of what we have achieved over the last eight years. It is very pleasing to note that around 20 per cent of this Company is owned by our employees and retail shareholders. Most of all, I am honoured to have worked alongside Royal Mail's people and the union leadership. It is their hard work and dedication that connects households, communities and companies across the UK every day. I would like to warmly congratulate Rico and Sue, two colleagues with whom I have had the privilege of working closely with for many years."
Rico Back and Sue Whalley
Peter Long, Chairman, said: "Under Rico's leadership, GLS has become the leading delivery company of its kind in Europe, making a highly valuable contribution to the wider Royal Mail Group at the same time.
"The Board believes that Rico's track record, his strong commercial acumen and his deep understanding of the delivery industry mean he is ideally placed to lead Royal Mail.
"It is also very pleasing to note that our succession planning has enabled us to make two major internal promotions today. Alongside Rico's appointment as Group CEO, I am delighted to welcome Sue to our Board. Sue is leading the very important transformation of our UK business. She took the principal role in negotiating the operational aspects of our recent agreement with the CWU and is leading on the implementation of all aspects of it.
"For some years, Sue led our Regulation and Government Affairs functions at Royal Mail, and was heavily involved in the privatisation process. Her very significant experience in strategy development, business transformation and regulation will be of great value to us."
Rico Back said: "I am very pleased to be appointed Group CEO and to lead a company which is so much a part of the fabric of the UK. I look forward to working closely with Sue, the wider Board and my Group colleagues. I would like to thank Moya for all her support and counsel over the years and wish her well in the future."
Sue Whalley said: "I am very pleased to be joining the Royal Mail Board. I look forward to working with Rico and the rest of the Board as we continue the transformation of the Group."
Rico and Sue will stand for election at the Company's AGM on 19 July 2018.
This announcement is made in accordance with Listing Rule 9.6.11 and contains inside information. In accordance with Section 430(2B) of the Companies Act 2006, the relevant disclosures will be made in the Annual Report & Accounts 2017-18.
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Notes to editors:
Biography: Moya Greene has been Chief Executive Officer of Royal Mail since the summer of 2010. Under Moya's leadership, Royal Mail has been transformed. The Group (excluding Post Office Ltd) made a reported operating profit before transformation costs of £18 million in 2010-11, before privatisation. By 2016-17, this had grown to £490 million. In the same period (excluding Post Office Ltd), the Group reported profit margin before transformation costs improved from 0.2 per cent to 5.0 per cent and net cash flow from operating activities increased by almost £1 billion from an outflow of £122 million in 2010-11 to an inflow of £754 million in 2016-17. Royal Mail is the pre-eminent delivery company in the UK, accounting for 53 per cent of the UK parcels market in 2015 and the vast majority of UK letter deliveries.
Remuneration: Moya Greene will receive a cash payment equivalent to 12 months' base salary and a payment equivalent to the target Annual Cash Bonus (£367,000) on the cessation of her employment on 14 September 2018. The Company is legally required to make this payment to Moya as part of her employment contract, which was approved by Government in 2010 when Royal Mail was in State ownership. Awards under the Annual Bonus Plan (both cash and shares) will continue to be earned and pro-rated in accordance with the relevant Plan rules. Grants of deferred shares already made will vest in accordance with the relevant plan rules. Grants already made under the Royal Mail Long Term Incentive Plan (LTIP) will be pro-rated and vest in accordance with the relevant Plan rules. All incentive payments and awards are in line with Moya's good leaver status. Moya's remuneration entitlements will be disclosed in the relevant Annual Report & Accounts.
Biography: Rico Back has been a senior executive at Royal Mail for 18 years. He led the development of what is now GLS from its inception (as German Parcel in 1989) into the leading European ground-based deferred parcel company. Under Rico's leadership, the company has built a major network in 41 European countries and nation states. GLS has consistently delivered volume and revenue growth. It accounts for around 35 per cent of the Group's adjusted operating profit after transformation costs (Royal Mail plc Half Year Results 2017-18).
Remuneration: As Group CEO and in line with the current remuneration policy, Rico Back will receive a base salary of £640,000 and a cash pension allowance of 17.5 per cent of base salary. This means that his fixed pay and benefits (approximately £790k per annum) will be equivalent to that of Moya Greene. There is no change to the annual bonus opportunity for the Group CEO, which will remain 200 per cent of salary. This will be split equally, as now, into an annual cash award and a deferred share award. Rico will also receive a maximum LTIP grant of 100 per cent of salary. In line with Royal Mail Group's other executive directors, Rico will be expected to retain any share-based awards until he has a shareholding equivalent to 200 per cent of salary. Rico will be entitled to benefits including a car allowance, financial advice and private healthcare for himself and his immediate family.
Rico and his family live near Zurich, Switzerland, where they have been resident for more than ten years and where his youngest child is in full-time education. Switzerland is Rico's home and he will continue to be legally domiciled there. On his appointment as Group CEO, effective 1 June 2018, Rico's normal place of work will be our London headquarters. He will pay full UK tax on all of his Royal Mail earnings, including any bonus payments. Rico's non-domicile status does not affect the UK taxation of his Royal Mail earnings.
Biography: Sue Whalley has been a senior executive at Royal Mail for 12 years. She was formerly Regulation and Government Affairs Director and was heavily involved in the privatisation process. Sue was appointed Chief Operations Officer in 2014 and, subsequently, Managing Director of Royal Mail Letters & Network. Sue is successfully leading one of the largest industrial transformation programmes ever undertaken in the country. She played the principal role in negotiating the operational aspects of the recent agreement with CWU, and is leading on the implementation of all of it. Prior to joining Royal Mail, Sue was a retail and strategy consultant at McKinsey & Company, where she spent 17 years advising a range of blue chip companies on strategy, business transformation and stakeholder management.
Remuneration: In her new role as CEO of Post and Parcels, Royal Mail UK and in line with the current remuneration policy, Sue Whalley will receive a base salary of £450,000 and a cash pension allowance of 17.5 per cent of base salary. She will receive an annual bonus opportunity of 200 per cent of salary. This will be split equally, as now, into an annual cash award and a deferred share award. Sue will also receive a maximum LTIP grant of 100 per cent of salary. In line with Royal Mail Group's other executive directors, Sue will be expected to retain any share- based awards until she has a shareholding equivalent to 200 per cent of salary.
Executive Directors' Remuneration will be published in the Directors' Remuneration Report in the Annual Report & Accounts 2017-18.
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