Martin Seidenberg, chief executive of International Distributions Services (IDS), the parent company of Royal Mail, received a pay package worth nearly £7 million for the year ending March 31, 2026, despite a significant decline in the company’s profits and ongoing delivery performance challenges.

According to IDS’s latest annual report, Seidenberg’s total compensation, which included salary, bonuses, and long-term incentive awards, surged to £6.9 million, more than triple the £2.1 million he earned the previous year. The increase was partly attributed to the “accelerated vesting” of long-term incentive shares following the company’s £3.6 billion acquisition by Czech billionaire Daniel Kretinsky’s EP Group in 2025.

The report also revealed that IDS’s pre-tax profits dropped by more than two-thirds, falling from £429 million to £141 million over the year. The group’s international parcel delivery arm, GLS, experienced a 17 percent decline in profits, contributing to a £56 million reduction in group operating profits, which settled at £222 million.

Within the UK, Royal Mail’s operating profits more than halved to £96 million from £198 million the previous year. This decrease was driven largely by rising labor costs, including minimum wage increases and an additional £133 million expense related to employee national insurance contributions.

Revenue at Royal Mail nonetheless grew by 2.6 percent, reaching £8.44 billion, supported in part by the company’s expanding parcel delivery business. Seidenberg highlighted that Royal Mail’s network is the largest of its kind in the UK, with around 30,000 lockers, in-shop parcel points, and parcel postboxes—an increase of 40 percent compared to the prior year. The company aims to expand this network to 45,000 locations by 2030.

Seidenberg defended the strategic changes underway, pointing to the relaxation of the universal service obligation—which traditionally required six-day-a-week post deliveries—as a means of enabling a “more efficient, reliable and sustainable” service. He emphasized a move toward parcel deliveries that minimize doorstep visits by staff and forecasted that Royal Mail would meet its next-day delivery target of 93 percent by April 2027. Currently, only 75 percent of first-class post arrives the next day, falling short of the target.

The company’s report also addressed a £114 million payment to one of Kretinsky’s affiliated firms, clarifying it was not a dividend but “interest paid on acquisition debt.” This payment attracted scrutiny due to similarities with financial practices previously criticized in other utilities for lack of transparency.

Overall, IDS’s results and executive compensation have drawn renewed attention amid the challenges faced by Royal Mail, as it seeks to adapt operations and improve performance under new ownership.