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MPs Call for Rail Chief to Reject Bonus

Sir David Higgins (cropped from Network Rail video)Network Rail chief executive Sir David Higgins is being pressured by MPs to reject a potential £340,000 bonus. The company, which is in charge of the nation’s rail infrastructure, is considering a new bonus scheme, which would reduce senior executives’ annual bonuses to as much as 60% of their salary depending on performance. This will be down from 100% of their salary, but Lord Berkeley, one of the company’s 120 members, has tabled a motion that annual bonuses be capped at 30%.

Sir David earns an annual salary of £560,000, and other directors earn around £338,000. A Network Rail spokesman said that the company’s members will meet later in the month to decide on the bonus scheme structure, but no decision has been made yet. This doesn’t mean that a bonus will be paid, just that a mechanism will be decided on. Like any private company, the remuneration committee will make the final decision, he added.

Former Labour rail minister Tom Harris has put a motion on the table that has been signed by 27 other members of his party. The motion calls on Sir David and the directors of Network Rail to reject any bonuses this year. He says that the rail company has been found in breach of its licence by the Office of Rail Regulation (ORR), which has also found major asset failures, poor management of track condition and congested routes – contributing to the country’s poor rail network performance last year. Network Rail members, on February 10, will be asked to confirm yearly bonuses for directors that amount to 60% of their salary. This means Sir David would be awarded a £340,000 bonus.

Speaking to reporters, Harris said that he’s not one to believe people shouldn’t get bonuses. But there’s no relationship at Network Rail between performance and reward. How dare they seek six figure bonuses when they are in breach of licence? They are fortunate to even get a salary, he added.

A spokesman for Prime Minister David Cameron says that reports like this about the proposed bonus for the rail chief is speculative. The prime minister, he added, has been clear about his views on salaries and bonuses, and he consistently says he wants to see restraint and responsibility. Transport Secretary Justine Greening says she believes payouts will be unjustified. After the ORR ruling in December, she said that the government has been clear that bonuses should only be paid for exceptional performance. Passengers will be very surprised if Network Rail tries to award bonuses next year after the ORR’s action.

However, Transport and Salaried Staffs Association (TSSA) general secretary Manuel Cortes isn’t satisfied. It’s unbelievable that Network Rail bosses are considering six figure bonuses the same week they plead guilty in a criminal suit over the deaths of two teenage girls six years ago in Essex, he says. This is a company funded by taxpayers, which has also been told not to award any bonuses this year by the ORR due to poor performance. Yet, they are planning to given themselves even more public money for failure to run trains on time. Reducing annual bonuses to 60% is just taunting the travelling public.

Aside from its poor performance and admittance of guilt in the 2005 deaths in Essex, Network Rail also faces prosecution for the death of a passenger in the 2007 Grayrigg derailment in Cumbria. Additionally, the company was fined £3 million last year over failings in the Potters Bar train crash, which caused the deaths of seven people. In May 2002, it admitted breaching safety regulations that led to the derailment of a London to King’s Lynn train outside of Hertfordshire station, which injured 70 people.

 

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