Royal Mail chief Moya Greene’s payout is another ticking bomb for Vince Cable

Moya Greene in red at the London Stock Exchange in October 2013; Moya Greene's £1.5m earnings were modest compared to those of other FTSE 100 bosses (Getty Images)

Don’t judge me on the Royal Mail float today, said Vince Cable in October. Judge me in three months’ time.

This classic political attempt to hook the postal service flotation scandal far into the undergrowth failed, of course. Despite his calls for a longer-term view to be taken, the negative headlines and bruising encounters in Westminster continued for weeks.

Now, not that anyone noticed, but the three months are up, and anyone wishing to judge Mr Cable can do so, at his own invitation. At last night’s close, the shares had risen 81 per cent since he priced them at 330p. In other words, the portion of the service that was sold fetched £1.4bn less than the shares were actually worth.

But that’s last week’s post: the public’s interest in the story has waned. For how long, though? Yesterday, another letter bomb started ticking in Mr Cable’s in-tray. Detonation date: less than three months away, when the Mail’s remuneration committee starts deciding how much its chief executive, Moya Greene, should be paid.

The Royal Mail’s chairman, Donald Brydon, lit the fuse in a provocative interview in which he directly challenged Mr Cable to deny Ms Greene the thumping great pay rise she deserves now the postal service is a FTSE 100 company.

Up until now, he suggested, hers (£1.5m last year) was an embarrassingly low civil service-style wage. He didn’t put it quite like that, instead describing it as being a “government-controlled pay structure”, but his meaning was clear.

So, how does her pay stack up with her FTSE 100 peers?

Technically, it’s a wee bit exaggerated to talk about her currently being on a £1.5m package, because £250,000 of that was for her relocation from Canada. She has since voluntarily paid the sum back.

But, even if she’d kept the quarter-mill, Mr Brydon is absolutely right in saying her package is teeny compared with the rest of the Footsie club. The High Pay Commission said average pay for the 2011 year was £4.7m for chief executives in the top 100. And that was not even a particularly stellar year for corporate performance – the FTSE-100 Index fell 6 per cent, so many CEOs failed to make their full performance targets.

Whatever one’s view of corporate pay in this country, it’s fair to say that Ms Greene’s wage would hardly give her bragging rights in the wood-panelled bar at Pall Mall’s Institute of Directors.

Nor would it be up to much in the industry bunfights of the logistics world. Her opposite number at Deutsche Post, Frank Appel, trousered €4.1m (£33.m) last year, as her friends are quick to point out.

However, as those pals must realise, just as much as Mr Brydon surely does, the Royal Mail is not the same as other private companies.

Although we talk of it as having been privatised, it is not yet a fully private company. Not only literally, in that the taxpayer still owns 30 per cent of the company, but culturally and politically. The Royal Mail remains a potentially deeply toxic political story for Mr Cable.

Having undoubtedly sold the business for too little money, paying its chief executive even, say £3m or £4m would provide a seriously big stick for the use of Chukka Umunna and Ed Balls against the Liberal Democrats in the run-up to the elections. Incidentally, if you think there’s plenty of time for any pay row to die down before elections next spring, think again: Royal Mail could wait many months until revealing Ms Greene’s pay if it chooses to keep us all guessing until publication of its annual report.

The Unite union is already warming up for a fight, national officer, IanTonks, saying yesterday: “Calls to boost Moya Greene’s huge salary even further is more proof that the rushed privatisation of Royal Mail is descending into a farce. As a major shareholder the Government should step in and make clear it opposes this sort of corporate greed.”

Labour was rather coy on the issue yesterday, presumably preferring to wait until a more opportune time to blast it out of the business pages and into the political editors’ sightlines. But rest assured, its policy wonks, keen these days to bash the corporates, will be working their angles up ready for an assault when the time is right.

What to do, then? Mr Brydon, apparently once dubbed a “thug” during a takeover battle at a previous firm he chaired, rather wolfishly said in yesterday’s Daily Telegraph: “In the [Royal Mail flotation] prospectus, the Government said the Secretary of State would act in a commercially responsible way. So we will find out in due course.”

A baited trap, if ever there was one. And not a sentence that will be appreciated in Whitehall.

However, it is not just Mr Cable who has stock to lose over this affair. Royal Mail’s own reputation is hardly riding high. Recent news of a stamp price hike was jeered in the media, and more than ever, customers can desert the service if they don’t like what goes on in the boardroom.

Rather than launch into a stop-us-if-you-dare £4m pay extravaganza for Ms Greene, Mr Brydon and his remuneration committee, led by the former McKinsey partner Orna Ni-Chionna, could make life easier for itself, and Mr Cable, by suggesting some seriously long-term performance criteria paid predominantly in shares. Then, at least, Mr Cable could say that her financial interests were aligned with those of voters.

We might even judge him less harshly.