The chief executive of Australia Post, Ahmed Fahour has resigned from the role of chief postie and will leave the organisation in July 2017.
Three government ministers, Mathias Cormann, Mitch Fifield and Michaelia Cash, made a move against the Australia Post board in the wake of the resignation, insisting that the Remuneration Tribunal be responsible for overseeing pay and conditions of the government corporation’s next chief.
The board will be required to provide terms which are consistent with the Remuneration Tribunal’s determination for the employment of ‘principal executive officer’ (PEO) roles.
The Australia Post board will need to demonstrate to the Tribunal that their proposed remuneration package is commensurate with the responsibilities of the role.
Fahour bucked the sector decline
A statement from Australia Post said Fahour tendered his resignation at a board meeting yesterday as the statutory corporation posted a $131 million half-year profit despite plummeting mail volumes and revenues.
“Today over 70% of our revenue and 100% of our profit is derived from commercial activities in parcels and e-commerce,” Fahour said in a statement.
The surprising strength of the financial result has allowed Fahour to exit on a high note after his $5.6 million compensation package attracted political criticism.
The result, and Australia Post’s hell-for-leather push to diversify its revenue streams into commercial and digital services will also serve as a vindication for the board’s strategy of retaining the former banker to engineer one of the biggest turnarounds in Australian corporate history.
Appointed in 2010 under a Labor government, Fahour’s seven-year tenure as Australia Post’s boss was hallmarked by a frank, unsweetened appraisal of where the organisation was headed unless radical action was taken to avert losses and find new business lines.
In 2014, Fahour bluntly warned the letters business had gouged a $300 million loss on Australia Post’s balance sheet and put government on notice that the shift to digital services by the public sector made it make-or-break for the letters business, as “the vast bulk of [Australia Post’s] mail is sent by business and government” with “transactional or promotional” mail making up 97% of letters volume.
Noting bipartisan commitment to digitising at least 80% of government communications by 2017, Fahour didn’t hold back.
“If that is the case, then our letter volumes will literally fall off a cliff,” Fahour said in his 2014 speech to the Australia-Israel Chamber of Commerce.
While the internet and email have decimated Post’s letters business as consumers, businesses and government all shift away from paper mail, Fahour’s sustained and aggressive expansion of its parcels business integrating with the physical footprint of its post offices and retail network managed to deliver a serious scale advantage over competitors – and potentially sustainable profits into the future.
Although the size of Fahour’s salary clearly irritated politicians, his successful transformation of a business severely disrupted by digital commerce arguably headed off losses that could easily run into the billions and cost tens of thousands of jobs.
Australia Post’s chairman, John Stanhope, wasted no time in ramming home the point that the organisation considered Fahour’s time to be a success.
“Ahmed was appointed at a time when Post was still highly dependent on revenue from the letters service, but the community’s use of letters had already peaked and was in the early stages of decline,” Stanhope said.
“He led the team that developed an entirely new strategy focused on investing in the parcels and eCommerce business.
“It was the right strategy. It has put Australia Post on a pathway to a sustainable future and avoiding a taxpayer bailout.”
More to come.