- 4 October 2018
- Transport / Logistics Services
A major investor in Royal Mail has expressed dissatisfaction at the pay and pensions deal offered to Royal Mail workers back in February after the postal operator’s shares fell sharply due to a profit warning issued earlier this week. Royal Mail’s shares were down 7% at close of play after the announcement.
The financial newspaper City AM spoke to a ‘top 10 institutional shareholder’ who expressed discontent over the way Royal Mail handled the pensions deal that was struck with unions earlier this year.
“There is frustration as the pension deal with the unions was presented as a win-win situation, but what wasn’t appreciated fully was the level of disgruntlement amongst the workforce,” the investor said.
The unions were happy with the pensions deal while investors weren’t. It included a 5% pay increase for full-time employees, as well as the UK’s first ever collective-defines contribution pension scheme.
Annoyingly for the shareholders there appears to be a toxic atmosphere between the shop floor and management which is leading to harder bargaining on the part of the unions.
Speaking to City AM, Russ Mould, an investment director for AJ Bell, told City A.M new boss Rico Back had inherited a tough situation from former boss Moya Greene.
“Moya Greene may have timed her exit well and Rico Back has a tough job on his hands,” he said. “He has inherited a difficult operating environment but will need to deliver on those cost and productivity goals if the issue of his own pay is not to resurface at some stage.”