International Distributions Services, the London-listed parent company of Royal Mail, could disclose Simon Thompson’s departure as early as this week.
The chief executive of Royal Mail is in advanced discussions to depart the company just weeks after MPs investigating the performance of the former state-owned monopoly questioned his credibility.
IDS, Royal Mail’s London-listed owner, may announce Simon Thompson’s resignation this week.
In recent weeks, Mr. Thompson reportedly grew increasingly disillusioned with his position amidst a bitter dispute with union leaders over the company’s future, according to sources in the City.
According to an industry insider, several board members believe the company needs new leadership after instability.
One insider stated on Monday that crucial details of his departure had not yet been finalized. Indicating that a formal statement may be delayed beyond this week.
However, it seemed “likely” that IDS will disclose before its annual results on May 18.
If confirmed, it would conclude a generally unsatisfactory tenure that began just over two years ago.
Mr. Thompson joined the IDS board as a non-executive director in November 2017, having previously held executive positions at Lastminute.com, Honda, HSBC, Motorola, and the supermarket chain Wm Morrison.
His most recent position was at the online grocery store Ocado.
In January, MPs on the business select committee accused him of deceiving them and ordered him to testify again.
The chairman of the committee, Labour MP Darren Jones, stated that failures in company policy regarding working conditions and the monitoring of postal personnel “can only be attributed to an unacceptable level of incompetence or an unacceptable level of ignorance about what is going on at Royal Mail.”
After protracted discussions, IDS and the Communication Workers Union (CWU) achieved an agreement last month. Without an agreement, Royal Mail might be forced into administration.
The company employs approximately 140,000 people, making it one of the largest private-sector employers in Britain.
CWU-eligible Royal Mail and Parcelforce workers receive a 10% salary increase over three years and a £500 lump sum.
If Royal Mail’s performance improves during the arrangement, employees will get 20% of its profits.
In exchange, the company intends to overhaul its working practices, including mandating Sunday work and introducing new seasonal work patterns.
The voting period for CWU members begins on 17 May and ends on 7 June.
Royal Mail’s universal service obligation (USO), which is supervised by Ofcom and requires the company to deliver mail to every UK address for the cost of a stamp, has become increasingly unsustainable in the face of new competition, according to executives.
The corporation, whose chairman is former British Airways CEO Keith Williams, may have replaced Mr Thompson.
Given his resignation, any reward for the Royal Mail CEO, who earned just over £750,000 last year, would be controversial.
Royal Mail Group, as the company was known at the time, was privatized in 2013 by the Conservative-Liberal Democrat coalition government, with Sir Vince Cable, the then-business secretary, stating that it was a necessary step to enable the company to modernize.
Any remuneration for the Royal Mail CEO, who earned just over £750,000 last year, would be problematic given his departure.
However, its stock has struggled in recent years, closing Friday at 245.8 pence, down 25% in a year.
