£41k bonus for ex-tram boss as staff pot slashed

Published on Tuesday 16 June 2009 09:49

FORMER trams boss Willie Gallagher is to pick up a £270-a-day bonus for the seven-and-a-half months he worked before quitting the troubled project – but other staff at tram firm TIE are having their bonuses slashed.

The Evening News understands bosses at the council-owned company have ruled the bonus pot for 2008-9 is to be cut from around 600,000 to 100,000 after the Newhaven to airport line slipped behind schedule and over budget.

It is believed that ex-chief executive Mr Gallagher, who was on a 170,000-a-year salary, will pick up 41,000 of the reduced pot for his work from April to November last year when he quit the scheme.

A further 41,400 of the 100,000 bonus pot due to the rest of TIE's top executives – including new chief executive Richard Jeffrey – has been voluntarily deferred until the end of the project.

The remainder of the bonuses for 2008-9 have been shared by around eight TIE workers, who each picked up an average of 2,500.

It is not clear how many of TIE's executives volunteered for deferring their bonuses and the criteria for a new bonus scheme has still to be worked out.

Transport bosses, who today ordered a wider review of how bonuses for TIE staff actually relate to the work being carried out on the ground, today insisted bonuses will only be paid where there has been genuinely outstanding individual performance.

Richard Jeffrey, TIE's chief executive, said: "Bonuses are an important tool in the recruitment, retention and motivation of staff.

"It is right that outstanding performance is rewarded but equally we cannot ignore the environment we operate in and the current status of the project.

"For example, some individuals have been to extraordinary lengths during the difficult negotiations with contractors and others have played their part in seeing this complex project through its first stages.

"We believe that this year's bonuses strike a better balance between staff management and the expectations of the people of Edinburgh."

He added: "Whilst respecting existing contracts, we will be undertaking a review of the whole bonus system at TIE, looking at ways to better link rewards for individuals to the overall performance of the project."

TIE came under fire in April when the News revealed tram staff have already picked up nearly 1 million in bonuses since the start of the scheme without a single tram track being laid.

Although Mr Gallagher did not pick up a pay-off when he resigned from TIE, he was due some money from a bonus structure which would have seen him pick up a total of 340,000 if he had stayed the course.

When the tram scheme got under way a bonus pot of around 3m was up for grabs if the controversial project was kept on time and in budget.

TIE employees are entitled to bonuses for their individual performance, as well as the overall performance of the project.

Last year the News revealed the then tram chief executive Willie Gallagher's basic salary had almost doubled in a year to 170,000.