Ahmed Fahour quits Australia Post

New curbs will be put on the pay of Australia Post’s boss after Ahmed Fahour quit in the wake of a row over his $5.6m salary.

Ahmed Fahour was at the centre of a storm over his pay.

The political storm over his $5.6 million pay packet has fast-forwarded the departure of Ahmed Fahour from the top job at Australia Post.

Following his resignation, the Turnbull government today announced a new plan to crack down on pay at Australia Post, ramping up the pressure on the government-owned company’s board.

Mr Fahour maintains that after seven years it is time to move on, which is true, but prior to the recent salary furore he had not previously given any indication that he planned to leave soon.

He formally resigned to the board yesterday and will leave in July.

Mr Fahour today said any assertions the pay issue had driven his resignation were “completely not true”. “We began this process a while ago,” he told a press conference, noting discussions began in 2016.

“I’ve had a pretty fair innings. It is time to give someone else a go.”

However, he conceded the transition process had been accelerated by the recent debate over his salary last year of $5.6m, which represented the highest yearly pay by any Australian public servant on record.

“There’s no question I have taken the conversations more recently into consideration.”

Mr Fahour leaves with $4.3 million in his defined benefits pension plan.

His departure comes after Australia Post today reported a sharp jump in first-half earnings as its parcels business continued to expand and its legacy postal business showed signs of stabilisation.

Mr Fahour’s pay had become the centre of attention, with everyone from Prime Minister Malcolm Turnbull down saying he earned too much.

Mr Fahour said resigning was a “very difficult and emotional decision”. But asked if he was bothered that there might be a perception he had been pushed out or was leaving ahead of appearing before a Senate committee next week, Mr Fahour said he was untroubled.

“It doesn’t bother me at all, not even remotely,” he said.

Mr Fahour publicly addressed the level of his wages for the first time since his fiscal 2016 salary was revealed two weeks ago, pointing to his record on delivering dividends to the government in defence.

“You make your own judgment on whether return on investment was good enough or not,” he said.

Pressed on whether changes were required to the salary structure at the head of the state-owned postal service, Mr Fahour said it was a matter for the board to discuss.

But in a statement released this afternoon, Communications Minister Mitch Fifield and Finance Minister Mathias Cormann said proposed conditions for the new chief executive would face scrutiny from the Remuneration Tribunal.

The government’s proposal requires the board to provide terms and conditions consistent with the tribunal’s determination for employment of “principal executive officer” (PEO) roles.

The PEO pay structure includes five bands, although the top one offers flexibility by allowing for total remuneration of upwards of $469,340.

“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 statement said.

Mr Fahour has earned about $23m from Australia Post since taking up the job in 2010, including $5.6m last year.

The government had demanded an overhaul of Australia Post’s executive pay following revelations of Mr Fahour’s generous salary.

Mr Turnbull called for Mr Fahour to take a pay cut, saying it would be “a good thing” for the chief executive to ­acknowledge his income did not pass the pub test.

“Under law the board has got commercial independence … Most people would look at this and scratch their heads and say ‘give me a break. It’s a big job, sure, he needs a good salary, sure; that is too much’.”

Mr Fahour used his resignation announcement to take a swipe at one of his biggest critics, fish-and-chip shop owner turned senator Pauline Hanson.

“One of the things that is sometimes lost among many people is the size and extent of this organisation. This is a very large organisation with a very large footprint,” he said. “It is fair to say it is a little bit more complex than running a fish-and-chip shop.”

Senator Hanson took to Twitter to hit back.

Ahmed Fahour quits. Says running Australia Post harder than owning a fish & chip shop. At least my shop never suffered a $221 MILLION loss!

— Pauline Hanson (@PaulineHansonOz) February 23, 2017

The pay row aside, Mr Fahour’s seven years at Australia Post have been successful, and extraordinarily so, when compared to his equivalents offshore and indeed competitors in the local parcel industry.

Mr Fahour has truly transformed the business, investing in parcels and in the process converting it from a $1.5 billion to $5 billion business while at the same time, with government help, keeping the post office network alive and the letters business going.

While Japan Post is putting the cleaners through its recently acquired Toll, Australia Post Parcels is going from strength.

Mr Fahour today defended the organisation and his record, telling reporters that Australia Post was not a taxpayer-funded organisation.

“We don’t take one dollar from the taxpayer,” he said.

Mr Fahour said Australia Post had delivered $4 billion in dividends to the Australian public and had avoided needing a $6.7 billion government bailout — a possibility flagged by the federal government in 2014.

Parcels boss Bob Black is one of the leading internal contenders for Mr Fahour’s job, with others including retail boss Chrstine Corbett, chief information officer Andrew Walduck and CFO Janelle Hopkins.

Post chair John Stanhope will go through a formal search for replacement for Mr Fahour, who he said had done an “outstanding job in transforming the business”.

“Now, with the business entering the next phase of its transformation, Ahmed’s decision to resign provides opportunity for a new leader to continue the development of Australia Post into a leading international eCommerce player,” he said.

For Australia Post’s operations, the big breakthrough came two years ago with an increase in stamp prices and the ability to provide two speeds of delivery, with the fastest service coming at an extra cost.

Postal services broke even in the last half on a 12.4 per cent increase in revenues.

Letter volumes have plummeted in recent years as more people have used email and other electronic messaging.

Australia Post’s overall revenue increased by 8.2 per cent to $3.5 billion and net profit from $16 million to $131 million.

Parcel services posted a 15.6 per cent increase in earnings and a 3.4 per cent increase in revenues.

The Australia Post brand is holding up well with its net promoter score increasing 1.6 points to 15.7 on a measure which tracks whether customers would recommend the service to their friends.

On any measure Mr Fahour has done a good job at Australia Post and just where he ends up next remains to be seen, as he says he has no other position in the wings.

He had previously worked briefly with a Middle East bank after leaving NAB in 2009.

Additional reporting: Rosie Lewis