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Royal Mail chairman leaves post after pay rows

The chairman of Royal Mail has stepped down with immediate effect.
Peter Long's departure comes just weeks after a bruising encounter with shareholders in which just over 34% of them voted against his reappointment at the company's annual meeting.
His replacement is Les Owen, former chief executive of Axa Sun Life, an existing board member.Royal Mail will hope that the boardroom reshuffle goes some way towards repairing relations with investors.Nearly three-quarters of shareholders voted against the remuneration report at the annual meeting in July, in protest at a €1m payment to Moya Greene, its outgoing chief executive, and one of €6m to her successor, Rico Back, even though he was already working at the company.
Royal Mail chairman leaves post after pay rows

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Peter Long wants to concentrate on his role as executive chairman of Countrywide
Mr Long himself also faced accusations of "over-boarding" since he is also currently full-time executive chairman of Countrywide, the UK's largest estate agency business, following the departure of its former chief executive after a string of profits warnings.Countrywide was last month forced to drop a pay plan that could have handed its top executives, including Mr Long, shares worth more than €20m.Some will speculate that Mr Long has left as a result of shareholder agitation.Royal Mail itself is insisting this is not the case. It stresses that, having just overseen an emergency €140m fundraising, Mr Long's commitment to Countrywide will "remain in place for the foreseeable future".The company added: "On that basis, Peter has reviewed his board appointments and concluded it is no longer possible to remain executive chairman of Countrywide and non-executive chairman of Royal Mail."Mr Long himself said: "It is with a heavy heart that I step down from the Royal Mail board. Over my three years as chairman, I have taken great pride in what has been achieved by the group. It is a company with an incredible heritage."However, Mr Long's replacement may also raise some eyebrows, since Mr Owen has been on the Royal Mail board since January 2010.The UK Corporate Governance Code is clear that, where a director has been on a company board for nine or more years, companies must explain why they are still in place.
It is understood that Royal Mail expects to see off any objections by making clear that Mr Owen will probably be chairman for no more than 12 to 18 months, during which time he is expected to oversee a "refresh" of the board, with other directors being replaced.One of those is likely to be Orna Ni-Chionna, head of Royal Mail's remuneration committee, who is regarded as chiefly responsible for the recent pay rows. Mr Owen was also a member of that committee.It is thought unlikely that Mr Owen's appointment will be heavily criticised.One of the biggest challenges facing Royal Mail during coming months is its negotiations with the government and unions over plans to introduce a new pension scheme.The company is one of only four FTSE-100 companies whose annual pensions payments exceed shareholder dividends and is seeking to mitigate that burden.The proposed arrangement, known as a "collective defined contribution scheme", seeks a middle way between "defined benefit" schemes, where employers guarantee their workers a specified pension at considerable expense and "defined contribution" schemes, where the employee takes on all investment risk and with no guaranteed pension.But the arrangement has never been tried in the UK before and the Department for Work & Pensions has made clear legislation may be needed in order for it to happen.As an experienced executive who spent his career in life assurance, Mr Owen is expected to be instrumental to those discussions, while the fact that he was on Royal Mail's board before it was privatised by the coalition government will also have given him some connections in Whitehall to help give the process a push.His last few months at Royal Mail represent something of a blemish on Mr Long's otherwise distinguished CV.He earned plaudits in the City when, in 1996, he became boss of the tour operator First Choice at a low point in its fortunes and oversaw a dramatic turnaround.
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He piloted the company through its 2007 merger with the larger TUI Travel, the German owner of Thomson Holidays, emerging as chief executive of the combined business.Mr Long, 66, remains on the supervisory board of TUI. With his commitments at Countrywide, though, it may be some time before he can enjoy a holiday himself.
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