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Network Rail bosses misleading briefing on bonus cuts

27 January 2014

Network Rail bosses have tried to "pull the wool" over the eyes of its public members in a new row over six figure bonuses at the taxpayer funded firm.

The charge was made by the TSSA rail union after NR sent a briefing note to its public members-who have to agree the bonuses-after the Court of Appeal called for the bonuses to "severely reduced" after a level crossing crash which left a 10-year-old boy with life changing injuries.
 
The Lord Chief Justice called for the bonuses, which can add 93% a year to the salaries of the top five executives, not just to be cut because of the accident in Suffolk in 2010 but in future accidents where negligence is proved in level crossing accidents.*
 
But in its briefing note for the members to use in response to journalists questions, NR claimed it had already cut its bonuses because of its failings at Suffolk.
 
"Following this incident, in 2012, the decision was taken not to award any incentive payments to senior executives themselves, with the money put toward's NR's level crossing safety improvement," said Suzanne Wise, NR's chief counsel.
 
"That simply is not the case," protested TSS leader Manuel Cortes. "NR was forced by Ministers to cut its huge bonunes in 2012 just a week after it finally pleaded guily to its culpability over the deaths of two school girls at Elsenham seven years before in 2005.
 
"It was nothing to do with the terrible accident at Beccles in Suffolk for which NR were rightly fined £500,000 last year. This looks like a clear attempt to mislead the public members by pulling the wool over their eyes and also the media into thinking bosses have already paid a bonus penalty for their negligence at Suffolk when it was in effect for their negiligence at Elsenham."
 
He called on the 44 public members to now veto the bonuses for 2013/14 which are due to paid in July this year. Three executives, Robin Gisby, Simon Kirby and Patrick Butcher, are all due a £300,000 a retention bonus in April on top of their annual and long term bonuses in the summer. Outgoing boss Sir David Higgins was paid £700,000 last year, including a £99,000 bonus.
 
"It is time to send a firm message over repeated level crossing failures," added the union leader. "Ten people have needlessly died on unsafe crossings over the past ten years, prompting an enquiry by the Commons Transport Select Committee. These bonuses are an insult to the victims and their families who want them stopped. We support them."
 


 
Lord Chief Justice Thomas said in the Appeal Court on January 17:
"If a bonus incentivises an executive director to perform better, the prospect of a signifiicant reduction of a bonus will incentivise the executive directors to pay the highest attention to protecting the lives of those who are at at real risk from its activities."
 

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