Post Office Limited bonus scheme
THE fastest route to full financial resolution for all parties involved in the Post Office scandal is – possibly - to retain the existing bonus payment scheme for the Post Office Limited (POL) board and executives but, instead, reframe it by including a serious penalty clause.
Given settlement of the Post Office scandal is already a bonusable metric for board executives inside the existing POL “Transformation Incentive Scheme” [TIS] – albeit one recently and rightly disputed by many including Chair of the Post Office Horizon IT Inquiry Sir Wyn Williams - I recommend that the POL Remuneration Committee urgently need to add much needed extra bite to their corporate governance. Primarily by – but not least – tweaking existing bonus metrics to ensure full financial settlement (FFS) receives much more urgent POL board attention.
The preferred Post Office Limited solution of merely tightening procedures, retrospectively repaying a notional sum (under existing “claw back” provisions), the slow motion resignation of CEO Simon Thompson along with issuing an apology borders on risible and is wholly insufficient. The POL Rem Co urgently needs to meet to agree and swiftly put in hand a revised bonus metric that gives far greater weight and teeth to expedite a full financial settlement.
My proposal would be to retain full financial settlement of the Horizon IT scandal as one of many existing POL performance metrics but to add a sufficiently significant non-fulfilment penalty clause to overall TIS bonus payments to gain the board attention that this serious FFS matter deserves but currently lacks. This penalty should – in my opinion – require a fifty per cent (50%) haircut to all Post Office board/executives bonus payments in any financial year that FFS remains outstanding. The mechanics to make this change are simple and already in place at POL. Adopting this serious penalty provision to bonusable objectives would demonstrate (and, thereby, ensure) that the POL board were taking the resolution of the Horizon IT scandal seriously.
Given existing and future investors are nowadays much more focussed upon environmental, social and governance credentials, this would provide a clear signal of better practice but also provide a verifiable test of board seriousness about ESG. The current POL failure to settle – ignoring it is obviously diabolical that this full financial settlement still remains outstanding/ongoing^ - is clearly an abdication of the governance aspect of existing Post Office board ESG responsibilities.
^ Filing incorrect Company Accounts and then laying them before parliament is small beer compared to the scandal of the 59 deaths (so far) attributed to the protracted Post Office Horizon IT Inquiry by the indefatigable investigator Nick Wallis. But, nevertheless, revealing too since it falls a long way short of best or credible practice.
Photo credit: The Post Office