Jersey Post defends £134K bonus award despite losses

TAXPAYER-OWNED Jersey Post has defended paying bonuses totalling £134,000 to two executives – in a year that it posted a £400,000 operating loss.

Assistant Treasury Minister Lindsay Ash acts as the shareholder representative for the government-owned business
Assistant Treasury Minister Lindsay Ash acts as the shareholder representative for the government-owned business

Last year, Tim Brown, the company’s chief executive, was paid £229,000 in salary and fees as well as a bonus of £75,000. Tim Barnes, the company’s finance director, received a salary and fees totalling £146,000 and a bonus of £59,000.

The company has defended the payments, while Assistant Treasury Minister Lindsay Ash, who acts as the shareholder representative for the government-owned business, said the payments were not solely based on the financial performance of the firm but also the ‘integral’ role it played in the community during the pandemic. Deputy Ash added that the bonuses had been paid as part of a set scheme, the meeting of targets and had been agreed by the firm’s remuneration committee.

However, Reform Jersey Deputy Geoff Southern questioned the justification for providing large bonuses while the company was showing an operating loss.

Referring to its annual report Jersey Post pointed out that:

- Jersey Post increased turnover by 27% and gross profit by 24% despite a 20% fall in letter volumes and 45% fall in the revenue of the counters business from a fall in foreign-exchange transactions.

- Before allowing for the amortisation [the gradual writing off of value over time] of investments, the group made a profit of around £1.5m compared to around £500,000 in 2019 – a 300% increase.

- Earnings before interest, taxes, depreciation, and amortisation increased by around 60%.

- Customer satisfaction as measured by the survey was at an all-time high.

- Jersey Post kept Islanders connected during lockdown, providing access to essentials, prescriptions and enabling people to work from home.

- There were rewards paid to all Jersey Post staff for their performance last year.

‘Looking at our report and accounts does not give a complete representation of the enormity of the challenges that the business went through in 2020, the huge sacrifice and commitment of colleagues and the support of stakeholders across the board. In many ways, every day was like Christmas peak and trends that had been happening over years accelerated over weeks,’ the annual report said.

‘Maintaining connectivity between tens of thousands of customers across 194 countries was a tremendous achievement. We are therefore proud of what the whole Jersey Post team across the globe achieved in keeping people and businesses connected.’

The JEP asked Jersey Post what the individual targets were that their executives had to meet to obtain their bonuses. However, they said: ‘We do not share targets of individuals.’

Deputy Southern said: ‘Where is the justification and what are the targets that have been met by those two officials? They at least should be able to tell you what were the targets.

‘It should not be on the basis of the pandemic but on the basis of the financials. To be awarded a bonus when the company is making a loss does not seem appropriate.’

Deputy Ash said that the bonuses were ‘not just revenue driven’ and that a ‘whole variety of things’ are taken into account.

He said: ‘One of those is what they have done for the community during the pandemic. Last year it was decided that they would get a bonus as the company had gone to huge extra lengths. It has been an incredibly difficult time that they have had to steer the company through and have helped the community – they did a tremendous job of delivering medicines, which was absolutely integral.

‘They have to go through the proper processes, there are proper targets and there are areas in which they went above those. It is all in line with the bonus scheme and they have not been receiving any more than what has been agreed in the scheme.

‘It is always a difficult situation with senior executives, who are often paid large amounts, but if you do not want to pay for decent staff then you generally do not end up with successful companies.’

Deputy Ash said the government was conducting a review of pay structures within all government-owned companies to see how they compared against those in place in the private sector and those in companies in different jurisdictions.

Asked whether he was comfortable with the level of remuneration the two Jersey Post executives received, he said: ‘Yes I am. If they did not do the job properly then they would not have received that level of remuneration. It is according to the supply and demand of executive pay and that is the going rate.’

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