Rail bosses get bonuses despite missing targets

Picture: Ian Rutherford
Picture: Ian Rutherford
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The chief executive of Network Rail (NR) is to receive an annual bonus of nearly £100,000 even though the railway infrastructure company failed to meet some of its performance targets.

Five other top NR directors will be getting bonuses of between £59,000 and £67,000.

Chief executive Sir David Higgins and his fellow executive directors could have been awarded annual bonuses of up to 60 per cent of their annual salaries if all performance targets had been reached.

But with the company failing to meet some targets, including its trains-on-time target, they had to settle for payouts worth 17 per cent of their regular wage.

That means Higgins, on an annual salary of £577,000, will get a bonus for 2012-13 of £99,082. Group finance director Patrick Butcher, on £394,000, will get a bonus of £67,658, with network operations managing director Robin Gisby and infrastructure projects managing director Simon Kirby both getting bonuses of £63,708.

Paul Plummer, the company’s group strategy director, is being awarded a bonus of £59,759.

NR has received warnings from the Office of Rail Regulation about its trains-on-time performance, with long-distance train punctuality being particularly singled out.

Where NR did particularly well was in meeting its passenger satisfaction bonus target of 84.3 per cent but the company failed to reach its financial efficiency and asset stewardship targets.

Shadow transport secretary Maria Eagle said: “Commuters facing inflation-busting fare rises will be outraged at the scale of the bonus packages being enjoyed by a few at the top of the rail industry.”

Manuel Cortes, general secretary of transport union TSSA, said the rail industry continued to reward “failure on a grand scale”. He added: “Again, NR have missed their punctuality and safety targets and still awarded directors massive bonuses.”

NR chairman Richard Parry-Jones said: “2012 was a year of positive progress for the company with some great highs – delivering seamless transport for the Olympics – to lows of frustration with a slowdown in our rate of delivering better train punctuality.”

He said the level of bonuses correctly reflected successes as well as shortcomings in the business. “Bonuses are only awarded for achievements significantly beyond what is expected of an executive in the delivery of their challenging day jobs,” he said.

NR said that its remuneration committee felt more could have been done to improve workforce safety and decided to reduce the overall bonus award by 10 per cent “to reflect these failings”.

The group also said that Higgins and his fellow top bosses will be getting salary increases of 2.5 per cent for 2013-14 in line with the management pay award for the rest of the company.

A UK government spokesman said NR was a private company and it was job of the independent Office of Rail Regulation to ensure that the company’s new incentive schemes only rewarded performance that delivered “real value for taxpayers and fare payers”.