Page last updated at 10:21 GMT, Thursday, 14 May 2009 11:21 UK

Rail chief gives up annual bonus

By Tom Symonds
Transport correspondent, BBC News

Iain Coucher: 'I want to talk about our successes without bonuses becoming the story '

Network Rail's chief executive is to give up his annual bonus for this year, saying he does not want it to cloud discussion of the firm's performance.

But other members of the Network Rail executive committee are still being considered for payments which could total hundreds of thousands of pounds.

And Iain Coucher will still be paid for the company's long-term performance.

Network Rail insists it has hugely improved the railways and executives should be rewarded for the achievement.

Reaction

"I want to be able to talk about the success of Network Rail and the rail industry without bonuses becoming the story," Mr Coucher told the BBC.

He was awarded £306,000 last year as part of a package of bonuses for executives totalling £734,000. This year he has told the company's remuneration committee not to consider him for the annual bonus. He said it was a personal decision.

NETWORK RAIL
Train
20,000 miles of track
1,000 signal boxes
40,000 bridges and tunnels
Operates 18 major stations
Carries 3m passengers per day
32,000 employees

Last year he was also awarded £214,000 under the Long Term Incentive Plan. If the committee makes a further award this year, Mr Coucher will take it.

The executives who could get payments are group infrastructure director Peter Henderson, operations director Robin Gisby, infrastructure investment director Simon Kirby, and planning director Paul Plummer.

The company's entire workforce is expected to receive bonuses of at least hundreds of pounds. The announcement is due in the next few months.

Transport Minister Lord Adonis praised Mr Coucher's decision to give up his bonus.

"I warmly welcome Iain Coucher's personal decision to forgo his bonus. It shows true leadership and a responsiveness to the public mood at this time of national economic hardship," Lord Adonis said.

The government denied it had put pressure on Network Rail to limit bonuses, and the company said Mr Coucher had taken the decision without any intervention from ministers.

The head of the Transport Salaried Staffs Association rail union, Gerry Doherty, said he was "pleased" with Mr Coucher's decision.

"There is never any justification in paying bonuses for running a state monopoly and, in view of the chief executive's £500,000-a-year salary, there is even less justification this year, given the public outcry over bonus rewards for failure," he said.

Bob Crow, the leader of the Rail, Maritime and Transport Union, said Mr Coucher was fortunate to be in a position to turn down a bonus.

"There are up to 7,000 jobs either axed or under threat on the railways at the moment and many staff are wondering if they will be the next to have their livelihoods kicked away," he said.

"They don't have the luxury of opting in or out of bonus payments - they just want to know if they'll be able to pay the rent or the mortgage next month."

Targets

Network Rail is a not-for-dividend company and its senior managers cannot be given the sorts of shares options offered in the private sector.

It is a condition of the company's operating licence that it offers an incentive scheme and it has argued strongly that the pay-outs encourage executives to hit performance targets.

Most of those targets are being met, including for train delays and safety. But it is understood the company will confirm in the next few months that one has not - to reduce the company's costs for replacing track and other aging infrastructure.

Network Rail has also been criticised this year for the disruption caused by engineering work on weekends and bank holidays.

Network Rail Chief Executive Iain Coucher
Mr Coucher may take future payments

The Office of Rail Regulation has ordered the company to cut engineering disruption by 21% over the next five years.

And in January a string of power problems resulting from engineering work on the West Coast main line caused repeated hold-ups for passengers.

The rail unions have also attacked the company's decision to delay some track replacement to save money.

Executives at Network Rail say this is a deliberate decision. The work is being put on hold until new engineering equipment can be introduced which will allow the job to be done more cheaply.

The company is confident its knowledge of the state of the track and signalling is good enough to be sure that not replacing it will not pose any safety risks.

Network Rail insists it has hugely improved the condition of the railways since taking over from its predecessor Railtrack, and its executives should be rewarded for the achievement.



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