Network Rail bosses have waived their bonuses

With so much news and focus around banker’s bonuses in recent weeks, it is interesting to hear how Network Rail bosses have waived their bonuses. The company responsible for most of the railway network throughout Great Britain, except for the London Underground, were expecting to pay out bonuses to six of their most senior executives.

For example, the CEO, Sir David Higgins, was due a bonus of more than £300,000 on top of his £500,000 salary but he, along with five colleagues, has voted to waive the bonus. Altogether their bonuses would have totalled £15.6 million. The money will instead be invested in safety systems to improve the network.

The Government has no authority to curb ‘incentive payments’ but the secretary of transport, Justine Greening, has confirmed that she will vote against the bonus package at the AGM for Network Rail on Friday. Despite the fact that the state provide £4 billion a year to the rail company, it has little power over the spending.

However, Network Rail has submitted to public pressure, and followed the example set by Stephen Hester, the CEO of RBS, and forgone their business bonuses. They are still entitled to their six figure salaries and other long-term investments.

With the recent remuneration row, the bonuses will be donated to a fund to improve rail safety. This will help to prevent problems in the future. Just last week, Network Rail was found guilty of breaching health and safety that led to two teenage girls being killed at a level crossing back in 2005.

The shadow transport secretary also felt that Network Rail are doing the right thing. Maria Eagle said that the senior management were making the right move in forgoing the bonus. With so many families in the UK struggling financially, and fares for people riding the trains going up by close to 15%, the rail company needs to do its share to improve the network.

The Labour party has been opposing the bonus proposals across the country, with Network Rail and RBS being some of the most public. They suggest that the timing of the proposals has been awful, and that they should never have even been considered, much less agreed upon.

Greening has proposed that in order to prevent similar problems appearing in the future, she was planning to appoint a special director to the national rail board whose job it would be to reflect the interest of the taxpayers who pay for the company. This would have prevented this particular bonus package from having been agreed in the first place, and stopped the company from having so much negative attention drawn to it.

It hasn’t all been bad at Network Rail however. Last year they managed to get 91.1% of trains to arrive at their destinations in time, with the London Overground service leading the way with 96.2% success. More good news in 2012 will keep Network Rail in the spotlight for the right reasons.