Rail service improvements and disruptions

03.02.12

Network Rail bonus ‘unacceptable’

The proposed bonus for the chief of Network Rail has been deemed ‘unacceptable’, by the Transport Secretary. Chief executive Sir David Higgins could receive a £336,000 bonus – 60% of his annual salary.

The focus on Sir David’s bonus comes after political pressure caused the chief executive of the Royal Bank of Scotland, Stephen Hester to give up his £1m bonus.

The new bonus scheme has been reduced from 100% of salary, but longer term incentive payments have increased. Labour peer Lord Berkeley, chairman of the Rail Freight Group and a member of RTM’s editorial board, has tabled a motion calling for the annual bonus to be capped at 30% instead of 60%. Transport Secretary is also opposing the pay-out.

Justine Greening said: “These latest bonus proposals are unacceptable. Network Rail needs to be responsible and exercise restraint.

“Labour designed a system where ministers have no powers to block Network Rail executive pay and which in 2008 saw bonuses of over half a million given out to the chief executive even when there were serious failures.

“This is clearly a flawed system which we have already addressed as part of our forthcoming Rail Review which will make Network Rail more accountable.”

Figures from the ORR showed that nearly 15% of long distance trains are running late, and that Network Rail was in breach of its licence agreement for poor performance. Additionally, Network Rail was in court this week to plead guilty for health and safety offences which led to the deaths of two teenage girls in Essex.

The bonus system is currently subject to the approval of Network Rail’s 120 members, largely drawn from the rail industry. The decision on whether to pay the bonus and its size rests with the Remuneration Committee and is due sometime this month.

A Network Rail spokesperson said: “There is no scheme in place and no decision has been made.”

Tell us what you think – have your say below, or email us directly at opinion@railtechnologymagazine.com

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