Network Rail enjoy. Courtesy of Phil Marsh

Network Rail’s Directors’ bonuses announced – No ‘F’ word allowed!

Published 07th June 2013

Rail infrastructure company claims that reduced bonuses track performance and the bad weather.

Network Rail (NR) has announced that its five executive directors have been awarded ‘significantly’ reduced bonuses for last year’s performance. These were reduced because of the varying performance when measured against specified targets. The wording is interesting describing failures as ‘targets missed’ thus avoiding the ‘F’ word!

The company it must be remembered funded by the Government to the tune of about £10million every day or between £3 and £4 billion a year. NR also has a huge debt profile reaching out over 30 years and as it does not have shareholders and is a monopoly is therefore it could be argued, unaccountable to a large degree.

Results for the 2012/3 financial year were:

1. Passenger satisfaction reach a record high – 85%

This is a good measure but many people do not understand what NR does. But, station projects such as the Kings Cross, Blackfriars and Paddington modernisation have been huge successes and NR should rightly be given big scores.

2. Passenger numbers reach 1.5bn for the first time since the 1920s

This is a major achievement by the whole rail industry, not just NR and again, should be applauded.

3. 95% of passengers felt that rail travel during the Olympics had exceeded or met their expectations

This is another good result but of course all enhancement work was paused on routes to Olympic venues and every member of staff that could be spared was put on front line duties so the plan worked well!

4. £4.4bn worth of work on almost 2,000 projects aimed at improving and expanding the railway

Much of this is routine maintenance work and although many improvements were made, it is wrong to include maintenance, or is it?

5. The renewal and rebuilding of 201 bridges and the replacement of 940 miles of track.

Again, much of this this should come under the heading of regular day to day maintenance which is not made clear.

6. Almost 91% of trains for the 12 months run to time, but below the targets set by the Office of Rail Regulation

This is a very good result despite the headlines. As more trains run, any disruption becomes more serious, more quickly. ORR has said it will fine NR millions of pounds for missing the target, but is there any point to this as the money would be better invested in the rail industry.

7. Significant improvement in the satisfaction levels of train and freight operating companies

A frequent complaint is that NR does not listen to their direct customers, who are the train operating companies. NR property is tasked with developing sites and they have failed badly in the last year and often delay train operator proposals. This is not mentioned.

They said

Richard Parry-Jones, chairman, said: “2012 was a year of positive progress for the company 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. The remuneration committee felt that while performance was good in most areas, truly exceptional performance had not been achieved in financial efficiency and asset stewardship, and our train performance targets were not met. But we also needed to recognise the significant successes that had been delivered in the business during the year."

The Labour Party said the bonuses were wrong bearing in mind fares’ increases and late trains. What Maria Eagle the Labour Shadow Transport Secretary seems to be unable to grasp is that it is the The Department for Transport who set the fares. And they said the bonuses were nothing to do with them (despite their massive funding!).

How much?

Details of the annual bonus award for the executive directors:

Current salary Actual bonus earned out of a maximum of 60% of salary

David Higgins £577,000 17% or £99,082

Patrick Butcher £394,000 17% or £67,658

Robin Gisby £371,000 17% or £63,708

Simon Kirby £371,000 17% or £63,708

Paul Plummer £348,000 17% or £59,759

Network Rail can proudly boast that it has one of the best safety records in the world which must be recognised but the remuneration committee felt more could have been done to improve workforce safety, but noted the development of a safety culture within the business. The committee used its discretionary powers to reduce the overall award by 10% to reflect these failings.


Due to the contraversial nature of this topic weve decided to make the following our monthly Poll Question: Should the Network Rail main board directors be paid a bonus?

The poll can be found at the bottom of our home page.

Written by Phil Marsh

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