Network Rail boss Sir David Higgins to get £99,000 bonus
Wednesday 29 May 2013
The chief executive of Network Rail (NR) is to receive an annual bonus of nearly £100,000 even though the rail infrastructure company failed to meet some of its performance targets.
Five other top NR directors will be getting bonuses of between £59,000 and £67,000, the company announced today.
Chief executive Sir David Higgins and his fellow executive directors could have been awarded annual bonuses of up to 60% of their annual salaries if all performance targets had been reached.
But with the company failing to meet some targets, including its trains-on-time target , the top bosses have got bonuses worth only 17% of their salaries.
But this still means that Sir David, who is on an annual salary of £577,000, will get a bonus for 2012/13 of £99,082.
Group finance director Patrick Butcher, who is on a salary of £394,000, will get a bonus of £67,658, with network operations managing director Robin Gisby and infrastructure projects managing director Simon Kirby both getting bonuses of £63,708.
Paul Plummer, the company's group strategy director, is being awarded a bonus of £59,759.
NR has received warnings from the Office of Rail Regulation about its trains-on-time performance, with long-distance train punctuality being particularly singled out.
The minimum target for which the executives would have qualified for any bonus in the train punctuality category was 92% of trains on time, with the maximum bonuses available if the figure reached 92.5%.
In the event, the actual 2012/13 punctuality figure was 90.9%.
Where NR did particularly well was in meeting its passenger satisfaction bonus target of 84.3% but the company failed to reach its financial efficiency and asset stewardship targets.
NR chairman Richard Parry-Jones said: "2012 was a year of positive progress for the company with some great highs - delivering seamless transport for the Olympics - to lows of frustration with a slowdown in our rate of delivering better train punctuality.
"While this was particularly impacted by a year of extreme weather, the wettest on record, we are working to improve the resilience of our network to cope with such demands."
He went on: "Our executive bonus payments for this year correctly reflect successes as well as shortcomings and as a result have been significantly reduced from a potential award of 60% of salary to 17% for the financial year just completed.
"Bonuses are only awarded for achievements significantly beyond what is expected of an executive in the delivery of their challenging day jobs.
"The remuneration committee felt that while performance was good in most areas, truly exceptional performance had not been achieved in financial efficiency and asset stewardship, and our train performance targets were not met.
"But we also needed to recognise the significant successes that had been delivered in the business during the year."NR said that its remuneration committee felt more could have been done to improve workforce safety and decided to reduce the overall bonus award by 10% "to reflect these failings".
The company also said that Sir David and his fellow top bosses will be getting salary increases of 2.5% for 2013/14 "in line with the management pay award for the rest of the company".
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