Page last updated at 15:38 GMT, Friday, 26 June 2009 16:38 UK

Rail bosses get 1.2m in bonuses

A train
Network Rail is responsible for the UK's rail infrastructure

Top Network Rail bosses will get bonuses totalling over £1.2m, despite criticism of the firm's performance.

Chief executive Ian Coucher will get more than £150,000 in incentive payments for the performance of his company over the last three years.

Directors Peter Henderson and Ron Henderson will each get more than £300,000.

The Office of Rail Regulation said it was "surprised and disappointed" at the decision to award large bonuses.

There were also accusations - strongly denied by Network Rail - that the company had attempted to "bury bad news" on the day Michael Jackson's death dominated news coverage.

The bonuses were defended by the firm in its annual report, which said Network Rail's successes "should not be overshadowed" by its failings.

The company - which owns and manages railway infrastructure - said that Peter Henderson will receive a £217,000 annual bonus and £112,000 as part of its incentive plan.

The committee has provided details of its reasons, but we don't find them compelling, and nor do we believe the decision will gain widespread stakeholder support
Bill Emery, ORR chief executive

And former financial director Ron Henderson will receive an annual bonus of £207,000 plus £112,000 under the three-year plan.

Mr Coucher recently turned down a separate incentive payment, which would have rewarded his performance on an annual basis.

His current bonus is instead based on the company's performance over the last three years.

Last month the Office of Rail Regulation (ORR) warned the company over its stewardship of the West Coast main line, which has been plagued by delays.

It said the line's performance in recent months had been "volatile, and the problems are increasing".

'Disgraceful service'

The problems came despite a £9bn upgrade project, which was completed last December.

More than one fifth of trains on the London-Glasgow line ran late last year.

Iain Coucher Chief Executive - Annual incentive: nil. Three year incentive plan: £150,255
Robin Gisby Operations Director - Annual: £81,345. Three year: £57,887
Peter Henderson Infrastructure Director - Annual: £216,920. Three year: £112,107
Ron Henderson now retired - Annual: £206,567. Three year: £112,107
Simon Kirkby Director of Infrastructure Investment -Annual: £61,345. Three year: £55,752
Paul Plummer Director of Planning and Regulation - Annual: £76,415. Three year: £65,151

Network Rail has also recently seen its annual profit fall and its debt level increase.

Pre-tax profit fell to £1.52bn in the period to 31 March, from £1.59bn in the same period a year before.

The company's net debt also rose to £22.3bn from £19.7bn. It also failed to meet efficiency savings targets set by the ORR.

ORR's chief executive Bill Emery said: "We are surprised and disappointed that Network Rail's non-executive directors decided not to exercise their discretion to reduce significantly the bonuses for its senior executives, reflecting the mixed performance of the company during the last year and the economic climate that is facing many of its customers and suppliers.

"The committee has provided details of its reasons, but we don't find them compelling, and nor do we believe the decision will gain widespread stakeholder support."

Unions also attacked the bonuses as "completely unjustified".

Transport Salaried Staffs Association leader Gerry Doherty said: "Iain Coucher and his cronies win the Brass Neck of the Year award for taking these completely unjustified bonuses.

"They were warned by [Transport Secretary] Lord Adonis and the ORR not to take a penny this year because of the disgraceful five-day-week service on the West Coast line when they should have been operating a seven-days-a-week service.

"They are treating passengers and ministers with contempt. And their cynicism in trying to bury bad news on the day of Michael Jackson's sad death is truly breathtaking."

BBC transport correspondent Tom Symonds said Network Rail strongly denied it waited until the death of Michael Jackson to release its annual report and details of executive bonuses, in an attempt to "bury bad news".

Network Rail says the annual report was put in the post on Thursday, before the singer's death. A spokesman said that "the general secretary of the TSSA, Gerry Doherty, should have found it in his mail this morning".

'Inflated bonuses'

Bob Crow, general secretary of the RMT transport union, said: "With thousands of jobs under threat across the railways the news that Network Rail bosses are lining their pockets with another round of inflated bonuses will come as a kick in the teeth to RMT members whose very livelihoods are on the line."

A Department for Transport spokesman said: "Network Rail bonuses are a matter for them but, as Andrew Adonis made clear earlier this year, we welcome Iain Coucher's decision to give up his annual bonus which reflects the public's mood on bonuses."

Anthony Smith, chief executive of the independent rail consumer watchdog Passenger Focus, said the bonuses may seem "premature" for some rail passengers. - especially those still waiting for a reliable service to arrive.

Network Rail's annual report defended the bonuses, saying its remuneration committee had reflected on the disruption to passengers on the West Coast line.

But it said it had noted that the scale of the delivery of the £9bn modernisation project "should not be overshadowed completely".

The committee also said train and freight company satisfaction with Network Rail had not shown the same progress as passenger satisfaction.

Customer and passenger satisfaction would be taken into account when considering the 2009/10 management incentive plan, it added.

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