Fury at Network Rail directors’ bonuses

The publicly-funded company, responsible for maintaining the country’s track and station infrastructure, made its announcement yesterday saying the awards were a “contractual right”.

Its chairman, Rick Haythornthwaite - who is not taking any bonuses – said the people were now enjoying better railways with more trains on time than ever before.

However, the company has confirmed its directors’ incentive scheme bonus for 2009/10 is being cut by 20% and directors salaries will be frozen.

The Office of Rail Regulation has called for Network Rail (NR) to explain its decision to award the bonuses.

A spokesman said: “We note that NR’s remuneration committee has partly exercised its discretion in awarding reduced bonuses to the company’s senior executives.

“While it is clear that the committee has considered our assessment of the company’s mixed performance, it has taken a different view on some issues.

“It will now need to fully justify how it has reached its decisions. We have made clear our concerns, including on safety, asset management and efficiency - and these concerns still stand.”

Ben Gummer, tMP for Ipswich, branded the bonuses “offensive”.

He told the EADT: “I think commuters and rail travellers are going to be completely fed-up after this decision following an unbelievably difficult budget with tough decisions for public sector workers and families everywhere.

“It’s simply offensive for Network Rail directors, who carry no risks because the company is underwritten by the taxpayer, to take bonuses like this.

“The Prime Minister has given gave up his Parliamentary pension – that should be a lesson to other people, that everyone needs to take part in reducing this appalling financial mess we have been left with and that includes Network Rail bosses.

“Hopefully, a sense of decency might encourage these directors to think again.”

Bernard Jenkin, MP for North Essex, said: “I think directors themselves have got to decide whether they are in the railway business for their own personal enrichment or in it because it’s a public service.

“I think they would find life easier if they treated the railways as a vocation, rather than a private business, particularly in these straitened times.”

He added Mr Haythornthwaite was “setting a good example” to refuse his bonus and said it was now down to the other directors “own consciences” whether they did the same.

David Bigg, the chairman of the Witham and Braintree Rail Users’ Association, said commuters would be “wound up something wicked” when they heard.

“It is totally out of order for directors of any company to pay themselves any bonuses when their employees have got a pay freeze.

“The vast majority of my members work in the private sector and they have not seen a pay rise for a year or two,” he said.

Mr Haythornthwaite, writing in the company’s annual report today, said: “Over the past year, the railway has continued to improve - it is safer, more punctual and enjoying more support from passengers and freight users than at any time in the past.

“Meanwhile, we have been delivering better-than-planned performance with healthy profits, all of which are reinvested in the railway.”

The company’s bonus scheme has been cut back 10% this year with each of the 37,000 workers getting a minimum of �958.

Mr Haythornthwaite added: “Having rescued the railway from its troubled state of earlier this decade, NR has entered a new stage in its transformational journey.

“We must recognise this and, as chairman, I believe it is crucial to look at how the remuneration of NR’s executive team should be structured.

“The key future objective is to deliver on stretching ambitions for passengers and freight users in what will be more austere times.

“To begin, I have ordered a review of how we can better align executive renumeration with expectations of passengers and public. “As part of this review, the views of our stakeholders and regulator will be sought and the scheme for 2010/11 suspended.”