Rail chiefs in line for large bonuses

Rail chiefs in line for large bonuses

Train punctuality will be expected in all conditions

Bosses at Network Rail, the new operator of the UK's rail network, are in line for hefty bonuses if they meet performance targets.

The not-for-profit body, which took over from Railtrack in October, has revealed a new incentive plan designed to make Britain's railways more efficient.

Directors could earn up to 80% of their basic salaries if they meet targets for train punctuality, cost control and the condition of the network.

The boost would take the salary of chief executive John Armitt to £800,000 - a figure Network Rail says it must offer to attract the "highest calibre" of executives.

Timely payments

The rail operator said directors will only receive the bonus payments if passengers are enjoying a "measurably better" service.

Key measures of performance include noting the number of trains that arrive less than five minutes late at final destinations, and the actual rise in passenger numbers per mile.

"This incentive plan will reward senior executives only if they deliver significant improvements in rail network performance," said Ian McAllister, chairman of Network Rail.

BASIC SALARIES

John Armitt, chief executive £450,000

Ian Coucher, deputy chief executive £400,000

Ron Henderson, finance director £300,000

Peter Henderson, project director £300,000

Chris Leah, safety and compliance director £300,000

"(It) is specifically designed to align executive remuneration with the interests of rail users - their interests will be identical."

A typical bonus would see Mr Armitt receiving his basic salary of £450,000, plus a further 80% of this figure if all targets are met - bringing his total package to £800,000.

The incentive plan is likely to apply to about 30 directors and senior executives at Network Rail.

The group took over responsibility of Britain's track, signals and stations last year after the troubled history of Railtrack.

It promised to put safety before profit and admitted it had a huge task in restoring public confidence.

Boom to bust

Railtrack was privatised in 1996, and initial enthusiasm sent shares to a peak of £17.68 in November 1998.

However, a series of incidents, including the Hatfield rail crash, undermined confidence in the group.

It was placed into administration in 2001 by the then transport secretary Stephen Byers in a bid to stem its rising repair bill.

Network Rail paid £500m for Railtrack's network, £300m of which was provided by the government.

It also inherited the company's £7bn debt.

The new operator insists it is made up of public interest members who have no financial or economic interest in the company.