Network Rail (NR), under fire over level crossing safety, is to reduce bonuses for top directors.
But under the new bonus regime proposed today, NR’s bosses could still get deferred annual bonuses totalling 20 per cent of salary. This means that if performance targets are met, NR chief executive Mark Carne who is on £675,000 a year, could get an annual bonus of up to £135,000.
To be voted on at NR’s annual meeting in July, the new bonus scheme ends the existing scheme which saw top executives not only eligible for a performance-related annual bonus worth up to 60 per cent of salary but also a three-year rolling bonus worth up to 100 per cent of salary.
In January this year, the subject of NR bonuses was raised in a Court of Appeal judgment which saw NR lose its appeal over a £150,000 fine over a 2010 level crossing incident at Beccles in Norfolk in which a 10-year-old boy suffered life-changing injuries.
The Court of Appeal said: “If ... a bonus incentivises an executive director to perform better, the prospect of a significant reduction of a bonus will incentivise the executive directors on the board of companies such as Network Rail to pay the highest attention to protecting the lives of those who are at real risk from its activities.”
In March this year, the House of Commons Transport Committee, in a report on level crossing safety which was highly critical of NR, said: “Given that Network Rail has recently been held responsible for the serious accident at Beccles in July 2010 we would be very concerned if its remuneration committee awarded bonuses to executive directors this year.”
Shadow Transport Secretary Mary Creagh said: “We welcome the end of NR’s mega-bonuses. Most hard-working people struggling with the cost-of-living crisis receive no bonus for doing their jobs, let alone one that more than doubles their salaries.”
Transport Secretary Patrick McLoughlin also said he was “pleased” by the proposals.