Amanda Burton Report – Clarification to Annual Report and Accounts 2021-22

Amanda Burton, who joined the Board of Post Office Limited as a Non-Executive Director on Tuesday 27 April as the planned successor to Chair the Remuneration Committee, has completed her investigation into the error with a sub-metric on the Transformation Incentive Scheme for 2021-22.

The final report has been sent to the Minister for Postal Affairs, Kevin Hollinrake MP, who has asked that it should be published by Post Office today. The report is available here

Amanda Burton’s report includes the following observations and conclusions:

• “The Remuneration Committee was mindful of corporate governance best practice and as far as applicable aimed to follow the UK Corporate Governance Code issued by the Financial Reporting Council (which is applicable to public companies). Many aspects of the Transformation Incentive Scheme followed the Code e.g. predictability, proportionality, alignment with culture and shareholder engagement. However, there were issues with clarity and simplicity.”
  
  
• “The wording of the first sub-metric was completely inappropriate once the Inquiry was placed on a statutory footing and the timelines moved considerably. In hindsight it was clearly inaccurate to suggest that Sir Wyn would be in any way involved in determining whether any part of the bonus had been achieved. There was no deliberate intention on anyone’s part to mislead the role of Sir Wyn in this matter.”
  
  
• “It is difficult to understand why the Inquiry first sub-metric was not questioned by anyone, and yet seen by so many people.”

The report has seven recommendations for the Remuneration Committee including:

• “Variable pay schemes, whether short term or long term, need to be simple, transparent and clear.”
  
  
• “The timeline between the initial proposal, design and approval of variable pay schemes needs to be shortened as it does not make sense to have schemes being debated months (even a year) after the awards should have been made.”
  
  
• “When assessing whether metrics have been achieved, there needs to be a clear audit trail of the data reviewed. When discretion is exercised, the circumstances need to be carefully minuted and explained in the Directors’ Remuneration Report.”

Post Office is taking the following actions:

• There will be no variable pay awards linked to work directly supporting the Horizon IT Inquiry.
  
  
• Executive Board members who benefitted from the specific Transformation Incentive sub-metric have voluntarily repaid it as have all the current members of the Group Executive. Other recipients of the Transformation Incentive are also being offered a way to voluntarily repay the specific sub-metric.
  
  
• The Chairman of Post Office, Henry Staunton, has offered his full support to the Postal Affairs Minister, Kevin Hollinrake MP, in considering any further reforms that may be needed in how the Remuneration Committee operates and how its recommendations are approved by the Board and the shareholder. This could be considered as part of the separate review commissioned by Kevin Hollinrake MP about the governance of remuneration at Post Office.
  
  
• Amanda Burton’s planned succession as Chair of the Remuneration Committee was completed at the end of May.

Commenting on the report, Henry Staunton, Chair at Post Office since December 2022, said:

“I reiterate the apology on behalf of Post Office for the error made in declaring this inappropriate sub-metric achieved as part of the Transformation Incentive Scheme. These mistakes, although inexcusable, were made by the Remuneration Committee with the belief that the Transformation Incentive Scheme as a whole was appropriate to prioritise the much needed transformation of Post Office.

“I support the conclusions and recommendations made by Amanda Burton, including re-engaging with the Government as shareholder to ensure any variable pay schemes are simple, transparent and clear. I have offered my full support to the Minister in considering any further reforms that may be needed.

“As Chair of Post Office, I am determined that every part of the business not only supports all aspects of the Horizon IT Inquiry’s work but also retains its focus to continue to transform the business, its culture and its operations, to help Postmasters thrive as they serve their customers and their communities across the UK.”

Ends