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Ministers must halt Network Rail bosses millionaires' club says TSSA

23 January 2013

Network Rail bosses have drawn up a blueprint for a new double bonus scheme that will turn them into millionaires, it was said today.

TSSA leader Manuel Cortes called on Ministers to halt the scheme which could see Sir David Higgins and four executives earn bonuses of 125% on top of their current six figure salaries at the taxpayer funded firm.

"It is deeply ironic that this is happening on the 50th anniversary of The Great Robbery. This is The Great Train Robbery Mark Two-the inside job," he said.

An internal NR briefing for public members at the firm shows bosses are now looking at two new bonus schemes, one annual and one long term, which could reward them with rolling yearly bonuses totalling up to 125% on top of their salaries.

Graham Eccles, chair of the NR remuneration committee, said comparable firms in the private sector paid annual bonuses of 75% of salary and 50% for long term bonuses.

He claimed 80% of the firm's leadership talent came from the private sector and "securing the right talent is the principal concern. Large scale, complex organisations such as NR require the right people."

Sir David Higgins, now on £600,000 a year, could see his annual salary jump to £1,350,000 if the new double bonus scheme is approved by the public members and the ORR.

The union general secretary said:

"These executives are living in cloud cuckoo land if they think the taxpayers are going to fund this blueprint to make themselves millionaires at our expense.

"While passengers struggle to cope with ever rising rail fares, it is simply scandalous that they should be looking to reward themselves with double your money bonuses at a publicly funded firm during the worst recession since the 1930s.

"There is already a Fat Cats club in the private rail firms with Ray O'Toole (National Express), Tim O'Toole (First Group) and Brian Souter (Stagcoach) all getting over £1 million a year.

"It is no wonder that we have the highest rail fares in Europe when such huge salaries are being paid out to bosses in a totally fragmented industry."

The public members will be addressed at a meeting in London tomorrow by NR's finance director Patrick Butcher who will tell them in a briefing on its £37.5 billion five year spending plan from 2014:

"Network Rail should be effectively incentivised to deliver and outperform achievable output targets and efficiency targets."

Mr Butcher's total pay package last year was £503,000. He has since been given a 3% pay increases plus a £300,000 "golden handcuff" bonus payable next year*.

ends

* Two other directors, Robin Gisby, operations director, and Simon Kirby, infrastructure director, will also be given "golden handcuff" bonuses of £300,000 next year on top of the proposed new annual and long term bonuses.

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