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Royal Mail chief in talks over standing down after strikes and bitter union row

Royal Mail

Royal Mail chief in talks to put stamp on exit plan

Royal Mail boss Simon Thompson is reportedly in talks to step down after questions were raised about his credibility by MPs investigating the performance of the company.

Thompson's departure as CEO could be announced by the board of International Distributions Services (IDS), Royal Mail's London-listed owner, as soon as this week.

City sources say Thompson had become increasingly disillusioned about the job in recent weeks amid a bitter fight with union bosses over the company's future.

Read More: Royal Mail and Communication Workers Union finally reach deal on pay

Additionally, some board members had concluded that the business requires fresh leadership after a turbulent period.

Thompson has been under fire from all quarters in the last few months, with MPs on the business select committee forcing him to give evidence for a second time after accusing him of misleading them at a hearing in January.

The committee's chairman, Labour MP Darren Jones, said failures in company policy relating to working conditions and the monitoring of postal staff "can only be due to either an unacceptable level of incompetence or an unacceptable level of cluelessness about what is happening at Royal Mail."

Read More: Royal Mail staff could stage new strikes if talks on pay collapse

IDS announced last month it had reached an agreement with the Communication Workers Union (CWU) after protracted negotiations, which had featured suggestions that Royal Mail could be placed into administration without a deal.

The company has a workforce of about 140,000 people, making it one of Britain's biggest private-sector employers.

The deal with the CWU includes a 10 percent pay rise over three years and a £500 lump sum for eligible Royal Mail and Parcelforce staff.

Read More: Rail staff, nurses and frontline Royal Mail workers to hold more strikes

Executives have warned in recent years Royal Mail's universal service obligation (USO), which is overseen by Ofcom and requires the company to deliver mail to every UK address for the price of a stamp, has become increasingly unsustainable in the face of new competition.

It is unclear whether the company, which is chaired by the former British Airways chief Keith Williams, has a successor lined up to replace Mr. Thompson.

Royal Mail Group, as the company was called at the time, was privatised by the Conservative-Liberal Democrat coalition government in 2013, with the then business secretary, Sir Vince Cable, saying it was a necessary step to allow it to modernise.

Read More: Royal Mail strikes hurt business more than rail walkouts over Christmas, new data suggests

The shares were priced at 330p, and initially soared, reaching a peak of over 500p, prompting accusations that it had been sold too cheaply.

However, its stock has struggled in recent years and on Friday closed at 245.8p, down a quarter over the last 12 months.

If Thompson's departure is confirmed, it would bring a largely unhappy tenure, which began just over two years ago, to an end.

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Thompson initially joined the IDS board as a non-executive director in November 2017, having had spells as an executive at companies including Lastminute.com, Honda, HSBC, Motorola and Wm Morrison, the supermarket chain.

His most recent role was at Ocado, the online grocer.

Any payoff for the Royal Mail CEO, who earned just over £750,000 last year, would be highly controversial given the circumstances of his exit.

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