Martin Seidenberg, the chief executive of International Distribution Services (IDS), the parent company of Royal Mail, received a total pay package of £6.9 million for the financial year ending March 31, 2025. This represents more than triple the £2.1 million he earned the previous year, according to IDS’s latest annual report.
The significant increase in Seidenberg’s compensation was largely driven by the accelerated vesting of long-term incentive share awards, which had been deferred for three years. These payouts were triggered following the £3.6 billion takeover of IDS by Czech billionaire Daniel Kretinsky’s EP Group last year.
Group Profits Plunge Despite CEO Pay Rise
The bumper pay package came despite a sharp decline in group profitability. IDS reported underlying earnings fell by a fifth to £222 million, as its GLS parcel arm was hit by regulatory changes in Italy and a challenging trading environment in Canada. GLS earnings dropped 17.1% to £237 million over the year.
Group-wide pre-tax profits more than halved, falling to £141 million from £429 million the previous year. IDS explained in its annual report: “The vesting of awards was accelerated at the point of takeover. No long-term incentive plan awards vested in 2024-25. This, along with the accelerated vesting that occurred in 2025-26, explains the increase in emoluments of the highest-paid director.”
Royal Mail Operating Profits Halve
Royal Mail’s UK postal arm saw annual operating profits plunge to £96 million, down from £198 million the previous year. The decline was attributed to soaring labour costs following minimum wage hikes and an additional £133 million employee tax bill. Employee costs rose by 5.5% over the year, including a 4.2% pay increase for frontline staff.
On an underlying basis, Royal Mail earnings improved slightly to £5 million, up from £2 million a year earlier, as revenues rose 2.6% to £8.4 billion. However, the previous year had benefited from the 2024 general election boost to letter mailings.
Takeover Costs and Universal Service Changes
Extra costs included another £57 million related to the firm’s £3.6 billion takeover by EP Group, on top of £28 million in costs incurred the previous year. Royal Mail is pressing ahead with nationwide changes to its universal service, including delivering second class post every other weekday and scrapping Saturday deliveries. These changes follow an agreement with trade unions.
Royal Mail’s parcel volumes rose 7% to 1.4 billion over the year, while addressed letters fell 10% to 5.7 billion. The decline in letter volumes reinforces the need to overhaul the universal service, the group said.
Martin Seidenberg commented: “Following Royal Mail’s agreement with the unions, we are rolling out universal service changes across the UK which will lead to a more efficient, reliable and sustainable service for our customers.”
Regulatory Pressure and Fines
Royal Mail is under increasing pressure to improve service levels. Regulator Ofcom launched an investigation earlier this month into the firm’s failure to meet delivery targets over the past year. Royal Mail missed targets for another year, achieving 75.7% of first class mail arriving the next working day and 90.2% of second class mail delivered within three working days. It was fined a record £21 million by Ofcom in October last year for missing targets in 2024/25.
