The head of International Distribution Services (IDS), the parent company of Royal Mail, received a remuneration package totalling nearly £7 million last year. This substantial increase, more than three times the previous year's figure, comes despite a notable decline in the group's overall profits.
Martin Seidenberg, Group Chief Executive of IDS, took home £6.9 million in pay, bonuses, and long-term incentive scheme awards for the year ending 31 March. This contrasts sharply with the £2.1 million he received in the prior year. IDS attributed this significant rise in emoluments to the £3.6 billion takeover by Czech billionaire Daniel Křetínský's EP Group, which led to IDS being delisted in June and triggered the immediate vesting of various incentive and share-based awards for Mr. Seidenberg.
Despite this executive payout, IDS reported a 20% fall in adjusted operating profits, reaching £222 million for the year. While Royal Mail itself saw a modest increase in profits to £5 million from £2 million, its parcel delivery service counterpart, GLS, experienced a 17% decline in profits to £237 million. This was partly due to regulatory changes impacting the delivery sector in Italy and the effects of US tariffs on Canadian businesses. Overall revenues for IDS rose by 3.6% to £13.6 billion, but total operating costs also surged by £629 million to £13.4 billion, largely driven by higher wages and increased employers' National Insurance contributions.
Within Royal Mail, parcel volumes saw a 7% increase to 1.4 billion, reflecting a continued shift in consumer behaviour towards online shopping. However, letter volumes continued their decline, falling by 10% to 5.7 billion. Adding to the challenges, the UK postal regulator, Ofcom, recently launched another investigation into Royal Mail for failing to meet its annual delivery targets. The company has already incurred £37 million in fines since 2023 for similar breaches, with nearly a quarter of first-class mail being delivered late in the year to the end of March.
The acquisition of IDS by EP Group was subject to a national security review, leading to several commitments from Mr. Křetínský. These pledges included maintaining IDS and Royal Mail's headquarters and tax residency in the UK for at least five years. Further assurances were given regarding no change of control for GLS or Royal Mail for three years, protection of Royal Mail pension scheme surpluses, and continued recognition of the Communication Workers Union and CMA Unite workers' unions.