Royal Mail Executive Pay is Unacceptable, says Hobson

THE WEEK: Morningstar columnist Rodney Hobson says the gap between corporate pay and performance is growing, despite protests from shareholders

Rodney Hobson 5 October, 2018 | 12:10PM

The gap between corporate pay and performance is growing, despite the correspondingly growing level of protests from shareholders. Royal Mail (RMG) is the latest example but it is unfortunately only one in a long list. The more money you pay a director, the less incentive there is for the individual to work harder as they know they will get a generous payoff when they are caught out.

Royal Mail has been under fire for overpaying directors and we can see that the criticism was justified

Royal Mail has been under fire for overpaying directors and we can see that the criticism was justified. Annual profits are now forecast at £550 million, and although the board couldn’t bring itself to say so in the statement, that is at least £100 million down on expectations and £150 million down on last year.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Intu Properties PLC4.80 GBX11.58
Royal Mail PLC176.35 GBX2.77
Ted Baker PLC142.60 GBX2.52

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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