James Moore: Haythornthwaite no longer with the angels

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The Independent Online

Outlook Another company which has opted to present a raised finger – or perhaps two raised fingers given that it is British – to the world is the publicly funded Network Rail, which yesterday showered more than £2m upon its managers.

The awards were made despite the new transport secretary Philip Hammond urging restraint, given the pay freeze that he and his colleagues are imposing on millions of other public sector workers. At least those that keep their jobs.

Unfortunately, while Network Rail is structured as it is, Mr Hammond can bluster as much as he likes but there is absolutely nothing he can do about it. This is an inevitable consequence of the way the company was structured by the last government, which wanted to keep its ministers as far away as possible from having to take responsibility for the shoddy state of Britain's rail network following the collapse of Railtrack. It's hard to see that changing on Mr Hammond's watch.

Bill Emery, the chief executive of the Office of Rail Regulation, has also weighed in having written to the firm to say he considered the 2009/10 performance to have been "mixed". Regular users of Britain's railways might find something of an understatement. Indeed, there are many thousands of passengers who would question the virtue of paying a bonus to any manager working anywhere in the rail industry. But they're obviously just little people who clearly lack an understanding of all the wonderful work these managers do. That, at least, appears to be the attitude of Network Rail chairman Rick Haythornthwaite. Mr Haythornthwaite didn't receive any bonus but he was duly trotted out to defend yesterday's payments as "deserved".

What is so disappointing about this is that this is the same Rick Haythornthwaite who was, at least once, on the side of angels when he voluntarily altered his contract at the then troubled engineer Invensys to put him on one month's notice rather than 12.

At the time he said he was motivated by controversy over executive pay and "rewards for failure". While he was hardly thrown into the poor house, the decision meant that any pay-off would be only a 12th of his annual salary. The contract change also effectively saw him waiving a bonus equivalent to his salary that was triggered by the group successfully selling off assets. So there is a certain irony in his reverting to corporate type and defending such egregious awards yesterday.

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