Network Rail bosses enjoy big bonuses despite train delays

Network Rail's top directors are to receive performance bonuses worth more than half their salaries, even though nearly one in five trains continues to run late. The organisation's employees, on the other hand, will receive a bonus equivalent to less than 5 per of salary.

Network Rail's top directors are to receive performance bonuses worth more than half their salaries, even though nearly one in five trains continues to run late. The organisation's employees, on the other hand, will receive a bonus equivalent to less than 5 per of salary.

The company, which is responsible for the country's rail tracks, stations and signalling, said yesterday its four executive directors would receive bonuses totalling nearly £900,000 after improving train punctuality last year to 83.6 per cent against a target of 82.8 per cent. Targets relating to the condition of the network and financial efficiency were also exceeded.

A further 2,261 senior and middle managers will earn bonuses averaging just over £11,000 while the remaining 27,300 staff will each get £1,112 - equivalent to 4.95 per cent of the average salary of £22,443. The total bonus pool is worth £53m.

John Armitt, Network Rail's chief executive, will get a bonus of £269,757 on top of his £485,000 salary, while the deputy chief executive, Iain Coucher, receives £240,834 in addition to basic pay of £433,000. The two other top executives - the finance director Ron Henderson and projects and engineering director Peter Henderson - each get a bonus of £179,652 on top of their £323,000 salaries.

The bonus payments are equivalent to 55.6 per cent of salary and are very nearly the maximum which Network Rail is allowed to pay. Annual performance payments are capped at 60 per cent.

Ian McAllister, the chairman, defended the size of the bonuses and the disparity between the rewards being paid to board members and those which staff will receive. "If you look at any FTSE 100 company then the bonuses are bigger and the discrepancy is greater. The chief executives of the train operating companies get bigger bonuses than we have paid and even Transport for London paid Bob Kiley a bigger bonus last year than we paid John Armitt," he said.

Mr McAllister added that as well as exceeding its target for reducing "delay minutes" the company had also beaten the target relating to the condition of the network measured by things such as the number of broken rails and signal and points failures.

In light of its outperformance last year the management has been set new and more demanding targets for this year and the three after that.

The goal this year is to cut delay minutes to 10.6 million compared with an original target of 11.3 million. Network Rail's aim now is to have 90 per cent of trains running on time by 2008 to 09 - a year earlier than originally planned. "When we took on the network, punctuality was 78.6 per cent, it is now running at 84 per cent and that is a pretty big improvement," Mr McAllister said. "We know we have more to do and we won't be content until we get to the levels we need to over the next three to five years."