It’s been a big month for Australia Post CEO Ahmed Fahour, aside from the scandal around the Methodist Ladies’ College board on which he sits. Fahour reported a solid profit result for the taxpayer-owned monolith, with earnings after tax rising from by $40 million to $281 million on the back of sales increasing by $140 million.

The Latrobe University graduate announced the profit result in Melbourne yesterday, and was quick to brush off pesky questions of corporate governance, especially on his own remuneration. While the government-owned enterprise doesn’t provide a formal remuneration report like ASX-listed companies, it did disclose that its highest paid executive (Fahour) was paid $2.78 million in 2012 — an increase of 27% from the prior year, helped by a generous $874,000 bonus.

The remuneration made Fahour the highest-paid government employee — earning almost five times what Prime Minister Julia Gillard was paid last year.

In his press conference Fahour appeared to be ready to answer the inevitable question on his own pay, with Fairfax’s Ben Butler reporting Fahour’s explanation. The former NAB Australian boss explained that “we’re a commercial business, we compete against domestic competitors such as Toll for example, and we also compete against global competitors — UPS, FedEx, DHL, TNT — we have to pay compensation to attract the best people”.

Aside from the fact the best performed CEOs (like Oroton’s Sally McDonald) tend to take lower salaries, Fahour’s explanation still doesn’t make a huge amount of sense. For a start, around 40% of OzPost’s revenue comes from its monopoly reserved letters business, which means the commercial part of OzPost is a little over $3 billion in size (its non-reserved service also benefits from OzPost’s massive reach, especially in rural areas).

Moreover, Fahour is well paid compared to his competitors. ASX-listed Toll Holdings reported revenue of almost $9 billion last year and paid CEO Brian Kruger $2.6 million, less than what Fahour received. UPS, the American logistics giant, generated revenues of US$52 billion last year and paid just over US$7 million to CEO Scott David to run a business around 10 times the size of OzPost. DHL boss Ken Allen, who oversees a workforce of 275,000 (also around 10 times the size of OzPost) was last year paid £2.9 million.

OzPost’s corporate governance issues didn’t end at remuneration. Fahour also rejected claims Australia Post’s multi-million dollar Olympics sponsorship was a junket, noting “revenue was greater than our cost”. How could the taxpayer-funded enterprise generate revenue from giving existing clients who already use the service taking business class airfares, opening and closing ceremony tickets and $700-per-night five-star hotel rooms?

Crikey asked OzPost for clarification. A spokesperson said the Olympics sponsorship generated $8 million in additional revenue (as well as other benefits). The problem is, the $8 million in revenue had almost nothing to do with the generous hospitality Fahour showered upon his guests, which included AFL boss Andrew Demetriou.

OzPost confirmed to Crikey that most of the quantifiable “revenue” Fahour referred to was generated from the sale of stamps. But the stamp revenue would have been in place well before the business class flights were booked.

In a further justification for the Olympics spend, Fahour claimed that “the biggest sponsor of the Olympics was UPS, the world’s biggest parcel company” and that “it’s good enough for them, and they’re out there trying to woo their customers, and it’s good enough for Australia Post”.

Aside from the small fact that OzPost is taxpayer owner (not shareholder owned) and operates in a completely different market to UPS, Fahour also got his facts completely wrong. According to The Guardian, UPS was a third-tier London Olympics sponsor — handing over only US$31 million (top-tier sponsors paid US$100 million) — meaning 18 other companies were “bigger” sponsors than UPS.