Network Rail awards executive bonuses despite failings

Network Rail has awarded its five executive directors annual bonuses despite its remuneration committee reporting an unsatisfactory level of workforce safety, which has resulted in the committee using its discretionary powers to reduce the overall bonus award by 10%.

The rail organisation’s remuneration committee felt that more could have been done to improve workforce safety, but it noted the development of a safety culture within the business.

Consequently, Network Rail chief executive, David Higgins, has been awarded a bonus worth £99,082 in addition to his current annual salary of £577,000. This will rise by 2.5% for 2013/14 following the committee’s decision to award a salary increase for executive directors in line with the management pay award for the rest of the organisation.

Richard Parry-Jones, chairman at Network Rail, said: “2012 was a year of positive progress for the organisation 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.

“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.”