Royal Mail chief executive Moya Greene has admitted to being "deeply offended" by criticism of her £1.5 million pay packet, blaming it on the "hopelessly broken" system for setting executive pay for government-backed firms.
Greene made the candid remarks in reply to an e-mail from a member of the public who expressed concern about the £250,000 housing allowance she was offered, and later paid back. She said the atmosphere around executive pay in the UK remained "highly politicised".
Greene received almost £1.5m in pay and benefits for the financial year 2012-13, comprising a £498,000 salary, £399,000 in extras under a short-term incentive plan, £200,000 in lieu of a pension and £127,000 in benefits like medical insurance and return flights to Canada.
The Royal Mail boss said she had been unimpressed with how long it took ministers and officials to settle her pay after she moved from Canada to take the post in 2010.
"I took on a company in grave difficulty. I was here for a full 15 months before officials and/or ministers deigned to explain the exact basis upon which I would be paid. I had long resigned my previous position," she wrote.
In the email seen by the Guardian, Greene said the system for setting chief executive compensation arrangements in commercial firms backed by the Government was "hopelessly broken here".
This comes after the Royal Mail boss' remuneration attracted fierce criticism. The Communication Workers Union (CWU) said weeks ago that postal workers would be "appalled" at the "excessive, inflation-busting increase" in bonuses for Ms Greene.
"It appears the company is adopting early the private sector penchant for higher prices and massive executive pay and bonuses," said deputy general secretary Dave Ward.
Royal Mail said in a statement: "We do not comment on individual correspondence. Royal Mail has enjoyed tremendous support from Government on many issues, not least the passage of the Postal Services Act which allowed for the implementation of a new regulatory framework, securing the pension transfer and the separation of the Post Office from Royal Mail.
"We are very grateful to ministers and their colleagues for their past support and continued assistance and counsel.
"The remuneration committee appreciates that executive remuneration is a sensitive subject in the current economic environment. Under Moya Greene's leadership, Royal Mail has been transformed. In 2010/11 Royal Mail was balance sheet insolvent with negative cash flows.
"The company also had going concern issues. For 2012/13, the group reported positive free cash flow of £334 million. Our core UK business has moved from being loss-making three years ago (minus £120m in 2010/11 to £331m in 2012/13) to being the single biggest profit contributor to the group.
"In the exceptional circumstances of the chief executive's relocation and commitment to the UK, additional assistance, on the purchase of a home, was offered given the difference in residential costs between the UK and Canada.
"The remuneration committee, consisting of all non-executive directors at the time, determined that a single payment should be made to the chief executive, rather than an annual allowance. The additional assistance amounted to £120,000 after tax.
"The chief executive was not involved in the decision and has voluntarily offered to return this assistance.
"The remuneration committee has accepted this offer and is arranging the process for repayment. It will also determine the process for the reimbursement of the company of any unrealised gain to date associated with this payment."