Disbelief at Network Rail bosses' bonuses

NETWORK Rail has come under fire for giving six-figure bonuses to its top directors.

Transport Secretary Philip Hammond wrote to the state-funded company last month urging restraint and pointing out that its top management already enjoyed "handsome" annual salaries.

Yesterday, however, the company said its top directors were getting bonuses totalling more than 2.25 million, including 641,000 for chief executive Iain Coucher, whose annual salary is 613,000.

Chairman Rick Haythornthwaite said the bonuses "had been earned", but Mr Hammond said he was "very disappointed that the executives have accepted bonuses of this scale in the current climate".

Unions joined in the condemnation, with Rail, Maritime and Transport leader Bob Crow branding Mr Coucher's pay-out "a national scandal" and Gerry Doherty, the leader of the Transport Salaried Staffs' Association,, saying Mr Coucher had "got away with daylight robbery".

There was also criticism from the Office of Rail Regulation (ORR) whose chief executive, Bill Emery, branded Network Rail's performance for 2009-10 "mixed" and also wrote to it warning about the level of bonuses. He said it was now up to the company's remuneration committee – which decided the bonuses – to "fully justify how it has reached its decisions".

The performance-related payouts comprised an annual bonus and an award under a three-year rolling incentive plan. Network Rail said the 2009-10 incentive bonus had been cut by 20 per cent, that directors' salaries would be frozen and that next year's incentive scheme would be suspended while it looked into its "future sustainability".

Mr Hammond said: "NR is of course a private company, but one that is dependant on taxpayer funding, so I am very disappointed that NR executives have accepted bonuses of this scale in the current climate.

"In the week when everyone has been asked to share the burden of reducing Britain's deficit, people will rightly be asking how NR's top executives feel this is appropriate."

Mr Haythornthwaite said: "Network Rail only rewards for success. This is measured against what matters most to passengers – a better railway with more trains on time.

"On that basis, awards for the past year have been earned, are a contractual right and should be paid."

An ORR spokesman said: "While it is clear that the committee has considered our assessment of the company's mixed performance, it has taken a different view on some issues.

"It will now need to justify how it has reached its decisions. We have made clear our concerns, including on safety, asset management and efficiency – and these concerns still stand."

Mr Coucher, who announced this month that he would be stepping down from his post, will receive an annual bonus of 348,000, plus 293,000 from the incentive scheme.

Mr Crow said today: "While hundreds of maintenance staff face the prospect of being thrown on the dole, 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."

Mr Doherty said: "This company does not own or run a single train and yet these payments are based on improved punctuality times. They are paying themselves for something they have not done."