Royal Mail said that chief executive Rico Back has agreed to step down with immediate effect after less than two years in the job.
“It has been a privilege to lead a company that is so much a part of UK life at this crucial time in its history. I am proud of what I, together with our dedicated and loyal team, helped to build,” Mr Back said in a statement on Friday.
AJ Bell said: “The middle of a global crisis feels like an odd time to part ways with a CEO, particularly one who has been in post for as short a time as Royal Mail’s Rico Back.
“With his P45 delivered, Back is being given more time to enjoy the Swiss penthouse from which he has reportedly been running the company.
“The best hint at the reasons behind his departure is the company’s statement that interim executive chair Keith Williams will lead discussions on ‘an accelerated pace of change across the business’.
“German-native Back took over as CEO in June 2018 and while a plan to transform the business initially won some favour with investors, Royal Mail ran into trouble as targeted productivity improvements were not met amid wrangling with the unions.
“Back could not be criticised for not aligning his interests with shareholders, snapping up more than £3.5m worth of shares in the business across his tenure. His parting statements wishing the company well may be more than just platitudes.
“Interestingly one element of the group’s recovery plan – the targeted transition from letters to parcels – may have been accelerated by the coronavirus crisis. Parcel volumes in the UK business were up 31% in April as more of us went online to shop with high street outlets and shopping centres closed.
“The increased volume of parcels was not enough to prevent a big decline in revenue as the number of addressed letters fell by a third. The GLS parcel networks business has seen volatile trading to match the uneven spread of the virus across the continent.
“Royal Mail’s board will need to move fast to appoint a successor given the big challenges facing the business and the market will want to hear more as promised when full year results are posted on 25 June.
“The bonus to be paid to frontline staff and withdrawal of incentives for the executive team may go some way to mending fences with a disgruntled workforce.”
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