NETWORK RAIL BONUSES CRITICISED BY TRANSPORT MINISTER
Network Rail has announced £2.4m of bonuses for senior management, earning the ire of the transport secretary.
Philip Hammond said he was “very disappointed” by the decision, and called for a “far-reaching” pay review.
Outgoing chief executive Iain Coucher gets a £641,000 bonus, giving earnings of £1.45m, up 53% from last year when he gave up part of his package.
The rail regulator had warned the government-subsidised infrastructure company about management pay.
Earlier this year, the Office of Rail Regulation (ORR) demanded “clear evidence” to justify any bonuses to company bosses.
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THE MANAGEMENT AND THEIR PAY
Name Role Bonus (£) Total Pay (£) Change vs 2009
Source: Network Rail
Iain Coucher Chief executive 641,000 1,447,000 +53%
Patrick Butcher Finance director 199,000 669,000 NA
Robin Gisby Operations & customer services 309,000 735,000 +104%
Peter Henderson Asset management 460,000 1,041,000 +15%
Simon Kirby Investment projects 331,000 769,000 +109%
Paul Plummer Planning & development 313,000 720,000 +104%
Ron Henderson Retired 102,000 128,000 -85%
13 non-exec directors 0 Total: 646,000 Avg: 50,000 +2%
Total 2,355 6,155 +39%
“Network Rail is of course a private company,” said Mr Hammond. “But one that is dependent on taxpayer funding.
“In the week when everyone has been asked to share the burden of reducing Britain's deficit, people will rightly be asking how Network Rail's top executives feel this is appropriate.”
The transport secretary called for the upcoming review of the management incentive plan to be “far reaching and fundamental”.
The ORR, which sets Network Rail's level of public funding, criticised parts of the operator's performance – including the death of three railway workers in the past year – in its recent annual assessment.
In addition it said: “We consider that the level of our intervention and the pressure we needed to apply went above what should have been required.”
The ORR also said it was “not yet convinced of the efficiency gains the company is claiming”.
However, the payouts were defended by Network Rail chairman Rick Haythornthwaite, who said the company “only rewards for success”.
“This is measured against what matters most to passengers – a better railway with more trains on time,” he explained.
The bonus decisions come as Network Rail seeks a successor to Mr Coucher to take over the negotiation of the next funding round.
Mr Coucher is set to leave after eight years with the firm, and three years as chief executive.
The RMT rail union's general secretary, Bob Crow, expressed outrage at the decision to pay such a large bonus to an outgoing manager.
“It is nothing short of a national scandal that… Iain Coucher is walking out of the door with a golden-handshake bonus of nearly two thirds of a million pounds,” he said.
“While this new government tell low paid workers that they've got to stomach a two-year pay freeze and attacks on their pensions, they are sitting back while Network Rail, to all intents and purposes a public company, fills up the coffers of the highest paid public sector boss in the country.”