The next managing director of Australia Post will take home millions of dollars less a year than departing boss Ahmed Fahour after the Turnbull government stripped the postal service's board of responsibility for setting the salary of its top executive.
Mr Fahour surprisingly announced on Wednesday that he would resign just weeks after the revelation of his $5.6 million salary caused a national furore and drew the ire of Prime Minister Malcolm Turnbull.
More BusinessDay Videos
Ahmed Fahour's shock Australia Post resignation
Mr Fahour surprisingly announced on Wednesday that he would resign just weeks after the revelation of his $5.6 million salary caused a national furore and drew the ire of Prime Minister Malcolm Turnbull.
Following Mr Fahour's resignation, Communications Minister Mitch Fifield and Finance Minister Mathias Cormann announced plans to give the independent Remuneration Tribunal oversight of pay and employment conditions for Australia Post's managing director.
The Australia Post board had previously set the managing director's pay independently.
The Remuneration Tribunal sets a total remuneration benchmark for various positions and employing bodies are allowed to pay up to five per cent above the reference rate. Annual performance bonuses are capped at 20 per cent of the executive's fixed salary.
Senators Fifield and Cormann said the Australia Post managing director's salary would be brought into line with with those of other "principal executive officers".
Principal executive officers in the Remuneration Tribunal's highest band receive salaries dramatically lower than Mr Fahour. Former Reserve Bank of Australia governor Glenn Stevens received total remuneration of $1 million in 2015, for example, while ABC managing director Michelle Guthrie is on a package of $900,000 a year.
Mr Fahour, who will step down in July, announced his resignation at a media conference to present the company's half-year results.
![Australia Post chief Ahmed Fahour announces the half-year result of $197 million profit.](/web/20170223142315im_/http://www.theage.com.au/content/dam/images/g/u/j/n/d/i/image.related.articleLeadwide.620x349.gujny3.png/1487846336170.jpg)
They showed Australia Post reported a net profit of $131 million in the six months to December 31, up from $16 million in the corresponding period the previous year.
Mr Fahour said it was "completely not true" to say he had resigned because of the controversy caused by the publication of his salary, but acknowledged it had accelerated his decision.
![Illustration: Ron Tandberg](/web/20170223142315im_/http://www.theage.com.au/content/dam/images/g/u/k/4/e/x/image.related.articleLeadNarrow.300x0.gujny3.png/1487846336170.jpg)
"I have been in this job for seven-and-a-half years - it's time," he said.
"CEOs have to know when to go.
"My job is done, I've achieved everything I need to achieve."
Mr Fahour, who began the job in 2010, said he had served for far longer than he had expected and that he was looking forward to a break after the "unrelenting" demands it presented.
Mr Fahour said there were doomsday predictions about the future of Australia Post when he took over but the company had successfully transformed itself from a letter-and-stamps business into a parcels and e-commerce giant.
Mr Fahour took a shot at One Nation leader Pauline Hanson, who had criticised his salary, by saying that running Australia Post is a "little bit more complicated than running a fish and chip shop".
Australia Post chairman John Stanhope said: "By any measure, Ahmed has done an astounding job in transforming the business.
"When he started, he was set the challenge to write the next chapter in the history of Australia Post and he certainly rose to that challenge."
When Mr Fahour's controversial salary was revealed earlier this month, Mr Turnbull said he had spoken to Mr Stanhope and told him he believed it was "too high".
Liberal Senator James Paterson, who chairs the committee that forced Australia Post to reveal Mr Fahour's salary, said: "Ahmed Fahour's resignation gives Australia Post the opportunity to reset its executive remuneration policies and adopt a new approach to transparency.
"They should do so bearing in mind that Australia Post is owned by taxpayers, who expect it to be well run and don't mind the executive team being generously remunerated, but not beyond community expectations."
Liberal MP Andrew Laming accused Mr Fahour of "cutting and running" ahead of a Senate estimates grilling next week and said his high salary had been a "shameful episode" for Australia Post.