Royal Mail said Mr Crozier had met all of his targets.
Royal Mail has been accused of "rewarding failure" after accounts showed chief executive Adam Crozier earned more than £3m last year.
Mr Crozier got just over £1m in pay and pensions, plus a bonus of almost £2m from a three-year incentive scheme.
One union called the wage "outrageous" at a time when post offices were being closed and services were being cut.
Royal Mail said Mr Crozier had exceeded expectations and met all the targets set for him.
Earlier this month Royal Mail revealed its losses for 2007 had widened to £279m, compared with a loss of £10m a year earlier.
It said it had faced "difficult challenges" after the opening up of the postal service to competition.
The Unite union said the Royal Mail was "rewarding themselves fantastically for failure".
Its stamped letters business made a loss for the first time in the last financial year.
Ian Griffiths, who was managing director of that business until April 2007, received £500,00 as compensation for his loss of office, the accounts show.
"Royal Mail has just claimed that it is in financial crisis, that employees are overpaid and is trying to reduce the pension benefits of its staff," said Billy Hayes, general secretary of the Communication Workers Union.
"At the same time as this, executive pay is completely out of control," he said.
Liberal Democrats business spokeswoman, Sarah Teather said that paying such large bonuses in a year when 2,500 post offices were being closed to save money, was "absolutely obscene".
"It's hard to understand the justification for such staggering amounts when the Royal Mail's finances are in such a mess," she said.