Great bonus backlash: now rail boss gives his payout to a good cause

By ANDREW WHITAKER
Published on Tuesday 7 February 2012 00:00

THE bosses of Network Rail have agreed not to accept controversial six-figure bonuses, amid growing pressure on the directors of the taxpayer-owned firm forgo the awards.

Chief executive Sir David Higgins announced he would give up a package worth £340,000 and instead donate the money to a rail safety charity.

The move came after UK Transport Secretary Justine Greening had threatened to vote against the bonus plan.

The decision by the directors of the company responsible for running the UK’s rail infrastructure comes after Royal Bank of Scotland chief executive Stephen Hester turned down his bonus, worth nearly £1 million, in the face of mounting public anger over the issue.

Senior Tory MSP Murdo Fraser, the head of Holyrood’s economy committee, seized on the Network Rail move to call on other taxpayer-owned bodies such as Scottish Water, which handed a £450,000 one-off pay-out to five of its executives, to reflect on future bonus packages for senior staff.

Mr Fraser said: “Clearly, there’s now very substantial pressure on all those in the public sector to take a cautious approach in accepting bonuses, even those that they may be legally entitled to.

“Other well-paid senior figures, in government quangos and bodies like Scottish Water, might want to reflect on how appropriate it is for them to take large bonuses in the future.”

Sir David, who joined Network Rail last year, insisted that he took the decision before the current row over the bonus payments broke out.

He said: “I and my directors decided last week that we would forgo any entitlement and instead allocate the money to the safety improvement fund for level crossings.”

Senior SNP MSP John Wilson, the deputy head of Holyrood’s economy committee, said the series of rows over executive pay showed the need for an “end to the bonus system”.

Mr Wilson said: “We need to have a transparent salary system, where people don’t have to rely on bonuses.

“We need to see an end to the bonus system.”

Sir David and six other directors had been eligible to receive up to 60 per cent of their annual salaries in one-off performance-related bonuses as well as longer-term bonuses of up to 500 per cent after five years if certain targets were met.

Network Rail initially insisted no decision had been made, but came under sustained pressure to curb the payments, with Labour leader Ed Miliband appealing for a “culture of responsibility” at the company.

Scottish Labour MSP John Park said: “In most cases these excessive pay awards didn’t even change when the economy got into real difficulty, but it looks now that there’s been a real shift away from the bonus culture because of the public anger and pressure over the issue.

“We now need to go further and look at the whole banking sector, where excessive bonus payments are widespread.”

Helen Lennox, head of corporate affairs at Scottish Water, said: “The payment of any performance payments is dependant on Scottish Water out-performing challenging and externally verified business targets.”

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Charles Linskaill

Tuesday, February 7, 2012 at 02:24 AM

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Jools in Edinburgh

Tuesday, February 7, 2012 at 01:17 AM

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well informed

Tuesday, February 7, 2012 at 12:37 AM

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Ford Transit

Tuesday, February 7, 2012 at 12:22 AM

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Ford Transit

Tuesday, February 7, 2012 at 12:15 AM

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