Could there be an express post for Virgin’s Paul Scurrah as Christine Holgate departs

Outgoing Virgin boss Paul Scurrah has emerged as one of the leading candidates to replace Christine Holgate.

Paul Scurrah. Picture: Lyndon Mechielsen

Outgoing Virgin boss Paul Scurrah has emerged as one of the leading candidates to replace Christine Holgate as chief executive of Australia Post after she resigned, effectively immediately, over the Cartier watch gift row.

Mr Scurrah will step down as chief executive of Virgin later this month when its $2.6bn sale to US private equity giant Bain Capital is finalised.

While he did not comment, The Australian understands Mr Scurrah — who served on Australia Post’s board for almost two years from July 2017 — could step into running the postal service almost immediately at it prepares for its biggest Christmas delivery period.

Mr Scurrah’s experience in building good relationships with unions and across a large workforce is appealing, given the relationship between Australia Post and the postal union has deteriorated since the government allowed it to deliver every other day in cities earlier this year, with little consultation.

Other possible candidates include former Myer chief executive Richard Umbers, who ran Australia Post’s parcel business for four years from 2010. After he left Myer, Mr Umbers joined German discount supermarket Kauf­land, but is understood to be in the market for another job after the company pulled its plans for an Australian launch in January.

Ms Holgate said that her employment at Australia Post had become a distraction — one the organisation could do without as it entered its peak Christmas delivery period and continued to combat a surge of coronavirus-­fuelled parcel deliveries.

“I firmly believe the ‘ship’ needs a strong captain at the helm to help navigate through this time,” Ms Holgate said. “The current issue I am managing is a significant distraction and I do not believe it is good for either Australia Post or my own personal wellbeing. Consequently, I have made the difficult decision to resign, hoping it will allow the organisation to fully focus on serving our customers.”

Christine Holgate. Picture: John Feder/The Australian.

Ms Holgate is the second high-profile chief executive at Australia Post to resign amid a political storm. Her predecessor Ahmed Fahour — who invested $2.5bn in transforming the organisation from being predominantly a letters business to a parcel juggernaut early last decade — resigned in February 2017 after his $5.6m salary was revealed during Senate estimates.

Then prime minister Malcolm Turnbull — who has supported Ms Holgate in the latest saga — weighed in at the time, saying Mr Fahour was being paid too much and warned of a “cult” of excess in Australian executive pay. Ms Holgate came under political pressure after it was revealed at Senate estimates, under questioning from Labor senator Kimberley Kitching, that she spent almost $20,000 on Cartier watches as gifts for four senior executives.

The gifts were a reward for securing a $66m-a-year deal with three of the big four banks to enable Australians to continue banking at post offices, giving Australia Post’s network of licensees a lifeline.

But Scott Morrison reportedly hit the roof after learning Ms Holgate told estimates she hadn’t spent taxpayers’ money on the Cartier gifts and that Australia Post was a commercial entity — exposing a disconnect between how the government and the Australia Post’s management view the organisation. While it isn’t taxpayer-funded, any surplus cash is returned to the Commonwealth via a dividend. One of the Australia Post executives who received a Cartier watch, executive general manager of business and government Gary Starr, also received a $413,438 cash bonus, taking his total salary to $1.24m in the 2019 financial year, according to the organisation’s annual report.

Ms Holgate had also attracted criticism after her office amassed almost $300,000 on its corporate credit last year and The Australian revealed hair and makeup were among executive expenses. Australia Post paid $34,500 for her to stay at Melbourne’s Grand Hyatt during her first nine months in the job.

Ms Holgate said she was proud of achievements at Australia Post.

“Our recent financial results delivered a record revenue of $7.5bn, up $500m or 7 per cent, and our profits before tax rose 30 per cent to $53.6m for the year. This was our highest-ever revenue growth in a year without acquiring a major asset.

“Our business transformation accelerated, we kept our people safe, we invested while avoiding a loss, unlike many of our international peers. Enabling almost 2000 posties to deliver parcels in vans created an opportunity for their roles to be sustainable and to serve our country better.

“Our strong parcel, services and international cross-border e-commerce businesses all helped compensate for having (delivered) 400 million fewer letters, covered $242m in letter losses and we still delivered a profit.” Ms Holgate said the positive trend had continued into this financial year.

“Australia Post’s first-quarter revenues of over $2bn are up 15 per cent, domestic parcels added $338m and pleasingly our post office revenues grew 19 per cent.

“Putting this in perspective, Australia Post delivered more growth in parcel revenues in the first quarter than for the whole of 2018. Since COVID began Australia Post has delivered 300 million parcels, with parcels now representing over 67 per cent of our business, while facilitating 82 per cent of Australia’s e-commerce, adding a further $4.2bn in economic contribution to our country.”

The Australian understands Ms Holgate has received calls from a raft of other corporate leaders sounding her out for potential roles. An Australia Post spokesman said she had “forgone her entitlements” including a payment in lieu of six months’ notice.