Rail chiefs to receive £300,000 bonuses
Thursday 19 July 2012
Rail bosses have approved almost £1 million of publicly-funded “golden carrot” payments as union members stood outside raging against the “great train robbery”.
Network Rail, the public company that manages rail infrastructure including stations and track, has approved "one-off, performance-related awards" of £300,000 each to three directors.
The payment is on top of their £360,000-plus salaries and was said to be awarded over fears they would be poached by other companies.
Network Rail members will also vote on millions of pounds-worth of future bonuses later this year, although the conditions and amounts have yet to be agreed.
Members of the Transport Salaried Staffs' Association (TSSA) union stood outside the company's annual general meeting at Glasgow's Grand Central Hotel dressed as "fat controllers" and waving placards attacking the Network Rail "gravy train".
The Office of Rail Regulation (ORR) has urged the company to make clear that "in the event of a catastrophic accident for which Network Rail was culpable, no bonuses would be paid".
Network Rail directors waived their bonuses for 2011/12 after they failed to meet performance targets, and the company has been warned it may be fined if targets are not met by 2013/14.
The firm's finance director Patrick Butcher, network operations managing director Robin Gisby and infrastructure projects managing director Simon Kirby received the additional £300,000 payments.
According to a Network Rail spokesman at the AGM: "These are retention bonuses. We know that all three of them have been approached by other companies to be poached, and we haven't got a bonus scheme in place.
"The board's and indeed the ORR's concern was that they could walk away right in the middle of us trying to deliver some rather big projects. So they said: if you stay here and deliver these things for us, we will give you these golden handcuffs.
"As long as they are still here in 2014 and their personal performance is at least as good, they will get the payment."
But the directors are still free to leave if they receive an offer that exceeds their salary and additional remuneration.
The arrangement would be better described as a "golden carrot" as it contains no contractual ties, according to the spokesman.
"To put this in context: if Network Rail was floated (on the stock market) it would be a FTSE100 company. The salaries of our executive directors would be in the bottom 25% of the FTSE250 average."
TSSA senior regional organiser Tom Kennedy attacked the directors' salaries and "the £18.5 million bonuses that Network Rail are proposing to pay to themselves over the next three years".
He said outside the Network Rail AGM: "Network Rail is publicly-funded. It gets £4 billion every year from the UK taxpayers, and the six senior directors of the company are all on salaries of between £330,000 and £500,000.
"They get a bonus each year of between 30% and 60% on top of their salaries, a long-term bonus that they get over three years and also golden handcuff arrangements.
"The UK taxpayer is funding astronomical salaries for people who are just doing their job."
If Network Rail did not pay "unnecessary and futile" bonuses, the money could be diverted to reduce fares or to improve rail infrastructure, he pointed out.
"The chair of the remuneration committee once said: we've got to be careful or we'll lose these people," said Mr Kennedy.
"But that is a specious argument. Network Rail has got about 38,000 employees, and if one of these directors stepped out of the way there would be any number of capable people willing to take their place at half the price."
At the AGM, Network Rail members voted 92.2% in favour of the retention payments.
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