A row has broken out after it emerged the new CEO of Royal Mail Rico Back paid no UK tax on a ‘golden hello’ incentive to take up the job. He was paid the cash as part of a deal to renegotiate his contract.

Thanks to the money being paid from the Netherlands arm of Royal Mail, General Logistics Services (GLS), no tax from this payment was paid to the UK government as Black is a tax resident of Switzerland. Campaigners who spotted this felt that he was given special treatment.

The news came as UK MPs on the Parliamentary Select Committee went for Orna Ni-Chionna, head of Royal Mail’s pay-setting committee, for failing to clamp down on corporate excess.

At its AGM in July there was a shareholder revolt over bosses’ pay when 70% voted against the deal. Chairman Peter Long quit shortly after.

Labour MP Rachel Reeves, chairman of the committee, pointed out that the £5.8 million initial payment was the equivalent of more than 250 postal delivery staff.

Reeves said: “No UK tax was paid on this astounding multi-million-pound deal, a sum paid for by UK customers as they post their letters and parcels, and an amount which would appal postmen and postwomen, and the wider public. 

“As people who use the postal service, we all have an interest that the money we pay is well spent by you.”

The payment was made to Back so he would agree to back out of his contract with GLS. The deal already had him paid more than then Royal Mail Group CEO Moya Greene.

The news comes as Royal Mail shares have struggled in recent weeks owing to perceived poor relations between management and frontline staff at the postal operator.