Railtrack boss waives bonus

Chief executive Steve Marshall has been criticised

Railtrack chief executive Stephen Marshall, at the centre of a row over a 12.5% pay rise, has waived his bonus and share options.

The decision to give Railtrack's chief executive a £50,000 pay rise to £450,000 was dubbed "obscene" by a survivor of the Southall train crash.

But now Mr Marshall has indicated he has made a personal decision not to participate in the annual bonus scheme on an ongoing basis.

We must consider what is the most appropriate mix of management remuneration and incentives

John Robinson
Railtrack chairman

The scheme entitles him to receive up to 50% of his salary each year, depending on performance.

He will also not participate in the executive share option scheme, and will cancel his existing share option entitlements with immediate effect.

Railtrack said the executive share option grant normally has a market value equivalent to one times salary.

Pay review

However, Mr Marshall has not cancelled his remaining performance incentive, of a special bonus opportunity of up to one year's salary, which may be payable two years after his appointment - November 2002 - subject to performance.

The move comes after Sunday's announcement of a pay rise for Mr Marshall infuriated passengers and rail unions.

Gerald Corbett: Criticised for his pay-off

Railtrack also said that chairman John Robinson had commissioned an early review of the compensation arrangements for executive directors and other senior executives.

Mr Robinson said: "Railtrack is in a unique position as a publicly listed company which is delivering a key public service with direct funding now being provided from public as well as private sources.

"Looking forward, we must therefore consider what is the most appropriate mix of management remuneration and incentives, recognising the legitimate sensitivities of our stakeholders but also the need to attract, motivate and retain high quality managers on to the railway."

Corbett row

The review is expected to report back later in the year.

The latest controversy comes after the row that followed the £860,000 payout to former chief executive Gerald Corbett last month.

And it follows the angry reaction of passenger groups and rail unions to the revelation that Railtrack directors, including Mr Marshall, were offered increased share options.

Carol Bell, co-chairman of Safe Trains Action Group, set up in the aftermath of the 1997 Southall rail crash, was one to express outrage at the 12.5% pay rise.

"I am stunned and very angry about this.

'Failure rewarded'

Mrs Bell, who was hurt in the Southall crash in which seven people died, said: "This is absolutely disgusting - it is really obscene."

Liberal Democrat transport spokesman Don Foster asked why Mr Marshall deserved this "inflation-busting pay rise."

"Taxpayers should not be used for rewarding failure but for improving rail services," he said.

A Railtrack spokesman said Mr Marshall joined the company 18 months ago as financial director earning £300,000 a year.

His salary then rose to £400,000 on being promoted to chief executive following Mr Corbett's resignation in the aftermath of the Hatfield train crash in November in which four people died.

'Insensitive timing'

Phil Wilks, external relations manager for the Rail Passengers' Council, said Railtrack had to pay the going rate to attract high calibre staff.

"Passengers may query the timing of the rise at the moment as insensitive in the light of recent events," he continued.

Only days ago it was revealed that six of Railtrack's directors had been awarded nearly £2m in share options in June.

Mr Marshall was offered 127,014 shares.