The postal service delivered only 73.7 per cent of First Class mail within one day, well short of its 93 per cent target.
Ofcom said it would take into account whether any “exceptional events” explained the shortfall, but that Covid was no longer “an excuse for poor delivery performance”.
Following a bitter dispute with workers over pay, Simon Thompson said it was the right time to quit. He will leave his role on October 31.
Keith Williams, chairman of Royal Mail parent International Distributions Services, said: “On behalf of the board, I would like to thank Simon for his significant contribution over more than five years at Royal Mail, both as CEO and previously as a non-executive director of the Board.
“As CEO, his leadership, resilience and unwavering drive to ensure that Royal Mail transforms for the benefit of our customers means we have set a clear path to turn the business around.
Mr Thompson said: “I have been incredibly proud to lead Royal Mail during this crucial period in its 507-year history.
“The changes we have made, the infrastructure we have put in place, and the agreements negotiated with our trade unions mean that Royal Mail now has a chance to compete and grow.
“That is what I have always wanted, and it is now the right time to hand over to a new CEO to deliver the next stage of the company’s reinvention.”
Royal Mail agreed a deal with the Communication Workers Union (CWU) last month after almost a year of negotiations. That deal included a 10 per cent salary increase over three years and a one-off lump sum of £500.
So what is Royal Mail and who owns it?
Who owns Royal Mail?
Royal Mail is a public service that for much of its 507-year history was a Government department or public corporation. The Government in 2011 passed the Postal Services Act, which gave the green light for 90 per cent of Royal Mail to be privatised. Royal Mail employees owned 10 per cent of the firm.
In 2013, Royal Mail was floated on the London Stock Exchange. The Government initially retained a 30 per cent stake in the service, but sold its remaining shares in 2015 under former chancellor George Osborne.
It is now a public limited company, meaning it is owned by shareholders. It trades on the FTSE 250 as RMG, having been demoted from the FTSE 100 in June.
“The Government’s decision on the sale is practical, it is logical, it is a commercial decision designed to put Royal Mail’s future on a long-term sustainable business,” Vince Cable said in 2013 when he was business secretary.
Royal Mail’s privatisation was contentious and led to widespread strikes called by the CWU. The company’s share price also shot up after it was floated on the Stock Exchange, leading to accusations it had been undervalued by the Government.
The company’s biggest shareholder is Czech billionaire Daniel KÅetínský, who controls the group Vesa Equity Investment. He has been dubbed the Czech Sphinx, due to his enigmatic business approach.
Mr KÅetínský, who also has stakes in Sainsbury’s and West Ham United, became the largest shareholder at Royal Mail in 2020. The billionaire, 47, is known for keeping a low profile and has not commented publicly on recent strikes.