Rail chiefs are blasted for keeping their huge bonuses

Published on Friday 26 June 2009 23:11

NETWORK Rail has been rebuked by its regulator for failing to slash six-figure bonuses for senior executives after causing massive delays on the Scotland-London west coast main line.

Passenger groups, unions and politicians also condemned the payouts of up to 372,000 each.

The Office of Rail Regulation (ORR) said it was "surprised and disappointed" the firm's non-executive directors had not used their "considerable discretion" to significantly cut the payments.

Bill Emery, its chief executive, said reducing the bonuses would have reflected "the mixed performance of the company during the last year and the economic climate that is facing its customers and suppliers".

He said the justification for the bonuses, which are based on performance of the rail network, was not compelling and would not gain widespread support.

Peter Henderson, Network Rail's group infrastructure director, will get a 217,000 annual performance-related bonus plus 112,000 as part of a three-year rolling incentive plan – on top of his 434,000 salary.

Ron Henderson, who stepped down as group finance director in April, will receive a 207,000 annual bonus plus 112,000 from the incentive plan, in addition to his 413,000 salary.

Bonuses of 137,000 to 142,000 will be paid to Robin Gisby, the operations and customer services director, Simon Kirby, the infrastructure investment director, and Paul Plummer, the planning and regulation director.

Iain Coucher, the firm's chief executive, who earns 605,000 a year, previously announced he would forgo his annual bonus, but will still receive 150,000 from the incentive plan.

Smaller bonuses, of at least 740, will be paid to the rest of the firm's 35,000 staff.

The ORR said upgrading work on the west coast main line had caused disruption to trains, and performance remained a substantial problem.

The Liberal Democrats said passengers would be shocked to hear "rail bosses were being rewarded for failure".

The Conservatives said they would give the rail regulator tougher powers to cut or cancel bonuses.

The rail union TSSA said the bonuses were "completely unjustified".

And the RMT transport union said the bonuses were "a kick in the teeth" for its members whose jobs were under threat.

Passenger Focus, the official watchdog, said the bonuses would seem "premature" to passengers who were "still waiting for a reliable service to arrive" on the west coast line.

The Department for Transport said: "Network Rail bonuses are a matter for them but, as (Transport Secretary] Lord Adonis made clear earlier this year, we welcome Iain Coucher's decision to give up his annual bonus which reflects the public's mood on bonuses."

However, Mr Coucher said Network Rail had had a good year and met nearly all its targets.

He said: "Train performance is at an all-time high, the railways have never been safer to travel on, millions of pounds have been saved from the cost of running the network and billions invested to make further improvements."