Page last updated at 01:22 GMT, Saturday, 7 June 2008 02:22 UK

Anger at rail chiefs' bonuses

Network Rail staff
About half of Network Rail's income comes from government

Unions and MPs from all parties have questioned Network Rail's decision to pay 55m in staff bonuses.

Chief executive Iain Coucher will get a total of 510,581, despite presiding over engineering delays that stranded thousands of passengers over New Year.

Cabinet minister John Denham said the decision "raised an issue" over performance-related bonuses.

Network Rail said the bonuses were justified because more trains were on time, and delays were decreasing.

Incentive plan

In addition to his 500,000 annual salary Mr Councher is to receive 305,581 as his annual performance-related bonus, along with an additional 205,000 under a separate three-year long-term incentive plan.

This is money that will have been taken from the Network Rail investment pot, and should instead be invested in the railways
Norman Baker, Liberal Democrat transport spokesman

Two other directors of Network Rail will each receive total bonus packages of more than 350,000 each.

All other staff will get an annual bonus of at least 871, with 55m being paid out in total - about twice the amount awarded last year.

On Friday, Mr Denham, Secretary of State for Innovation, Universities and Skills, said that there was "no point" in having performance-related bonuses if they failed to take into account that only half the job had been done properly.

He said: "Whether people should get performance bonuses of that scale when there have clearly been very significant problems I think raises an issue that comes up too often with performance bonuses."

Louise Ellman, the Labour chairman of the House of Commons Transport Select Committee, described the bonuses as "outrageous and showing contempt for the public".

She added: "The travelling public will feel outraged, as I do, that they are awarding themselves these bonuses."

The Conservative transport spokeswoman Theresa Villiers said she was "astounded" at the size of the bonuses.

'Fiasco'

She added: "Although there is some good news in the report of the company's activities this year, the engineering over-runs at the New Year were a fiasco for thousands of passengers."

Liberal Democrat transport spokesman Norman Baker said: "This is money that will have been taken from the Network Rail investment pot, and should instead be invested in the railways."

Bob Crow, leader of the RMT transport union, said: "Once again we have Network Rail management showing that there's one rule for those in the big house and another for everyone else."

Network Rail's remuneration committee chairman Jim Cornell decided to back the bonuses, despite a formal letter last month from the Office of Rail Regulation (ORR) which pointed out his firm's performance deficiencies.

In February the ORR fined Network Rail a record 14m after engineering work on the West Coast Main Line over-ran during the Christmas and New Year period.

At the time, ORR chief Chris Bolt said that, while he was powerless to reduce the size of the bonuses paid to Network Rail bosses, he might press for a tightening up of the procedures by which bonuses were awarded.




SEE ALSO
Bonuses of 55m at Network Rail
06 Jun 08 |  Business
Branson warns of more rail misery
23 May 08 |  Business
Network Rail: company profile
28 Feb 08 |  Business
New Year rail delays 'a fiasco'
08 Jan 08 |  UK Politics
More rail delays for passengers
01 Jan 08 |  England

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