Plan for Remuneration Tribunal to be involved as Stanhope praises Fahour
Amid calls for Australia Post to be privatised and a public defence of resigning CEO Ahmed Fahour by his chairman, the federal government has moved to bring the government-owned enterprise under closer control.
The government will seek to put pay and employment conditions of any future Australia Post managing director under Remuneration Tribunal oversight.
If agreed, this will shift some of the burden of such decisions from one independent body to another.
In a letter from joint shareholder ministers, communications minister Mitch Fifield and finance minister Mathias Cormann have asked for the Remuneration Tribunal to determine the terms and conditions for the managing director’s position.
Under the Australian Postal Corporation Act, the Australia Post board of directors is responsible for decisions regarding the terms and conditions of the managing director’s employment.
Following these changes, the Board will be required to provide terms which are consistent with the Remuneration Tribunal’s determination for the employment of ‘principal executive officer’ (PEO) roles.
In her capacity as minister assisting the prime minister for the Public Service, employment minister Michaelia Cash has been requested to declare that the managing director’s role should sit within the Tribunal’s PEO classification structure.
That structure consists of five bands, including terms and conditions that apply to offices in those bands.
According to the tribunal’s December determination, the top band, Band E, total remuneration appears to be open-ended from $469,340, that starting point being less than 10 per cent of Fahour’s annual remuneration.
“The Australia Post Board will need to demonstrate to the Tribunal that their proposed remuneration package is commensurate with the responsibilities of the role,” the government says.
The tribunal reports to ministers on its determinations.
ATN has sought government clarification on the details and what the move might mean for other senior executive positions.
Australia Post chairman John Stanhope has been advised of the proposed changes.
While insisting times had changed and the next MD would not be paid as much, Stanhope says Fahour’s legacy as CEO will be felt for many years to come.
“By any measure, Ahmed has done an astounding job in transforming the business,” he says.
“When he started, he was set the challenge to ‘write the next chapter in the history of Australia Post’ – and he certainly rose to that challenge.”
The next MD will be expected to push on with the e-commerce progress the organisation embarked on under Fahour.
“Ahmed was appointed at a time when Post was still highly dependent on revenue from the letters service, but the community’s use of letters had already peaked and was in the early stages of decline,” Stanhope says.
“He led the team that developed an entirely new strategy focused on investing in the parcels and ecommerce business.
“It was the right strategy. It has put Australia Post on a pathway to a sustainable future and avoiding a taxpayer bailout.”
In doing so, the firm:
- acquired the remaining half of StarTrack from joint venture partner Qantas
- doubled capacity of its Melbourne and Sydney parcels centres
- Installed 24/7 parcel Lockers at 264 sites, and partneried with Woolworths to install a further 500 sites
- built the MyPost platform for customers to register their delivery preferences online.
- invested in and formed an international e-commerce alliance with Aramex.
As a result, revenue and profits from the Parcels business has more than doubled.
Fahour’s other achievements included reform of the letters service, which had halved in volume since the 2008 peak.
“By remaining a self-funded business, the taxpayer avoided a potential $6.7 billion bailout over the next decade. Instead, Australia Post has received no taxpayer money but delivered to government over $4 billon in dividends, taxes and CSO funding in the past seven years,” Stanhope adds.
“As well, we have been able to support our people through dramatic change. Almost 10,000 staff have now been retrained and redeployed into new roles through our Post People First Program.”
His board will begin the search for a replacement immediately and consider internal and external candidates with the winner to take over in July.
Meanwhile, as parts of the mainstream press argued Australia Post should be floated, the better to compete against competition with the likes of FedEx, UPS, Toll/Japan Post and others, other parts highlighted politically sensitive relations the organisation has with the Communications, Electrical and Plumbing Union which look set for an airing in the Senate.