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Network Rail bosses u-turn over big bonuses

18 March 2014

Change follows criticisms over level crossing fatalities

Network Rail bosses have drawn up plans to significantly curb their six figures bonuses in the wake of strong criticisms over failures in their level crossing safety record, the TSSA revealed today.
Documents leaked to the union show they while they will scale back on bonuses, they are planning to increase base salaries to compensate for the loss of the twin bonuses which have paid out over £10 million on top of their salaries over the past decade.
The plans come in the wake of criticism from the Commons Transport Select Committee over the firm's "callous disregard" towards bereaved families whose loved ones have died on unsafe level crossings. Louise Ellman, committee chair, has called for all bonuses to be cancelled this year.
In January, the Lord Chief Justice called for the bonuses to be "severely reduced" after he threw out an appeal by NR over a £500,000 fine imposed on it after life changing injuries suffered by a 10-year-old boy on an unsafe level crossing in Suffolk.
NR now plan to scrap their long term bonuses for their five top executives which pays out 33.3% each year. A seperate annual bonus, which pays out a further 60%, will be largely cut back as well.
Outlining the plan to public members, Michael O Higgins, chair of NR remuneration commitee, said his committee were working on "a move towards a far lower level of variable pay for directors, potentially coupled with higher base pay".
Despite the vast amount paid out on bonuses over the past decade, he claimed the existing top team "almost wholly discount variable pay in their thinking and some had said they would not want to participate in a variable pay scheme." He admitted that the existing bonuses were "probably not consistent with NR's new public sector status".
 TSSA leader Manuel Cortes said: "We obviously welcome any sinner that repenteth but, given the amounts involved here, this could be one of the most expensive conversions ever seen on the Road to Damascus. This very generous annual and long term bonus scheme has paid out over £10 million in taxpayers money over the past decade while we have argued for it to be scrapped at what is a public sector  firm.
"We don't believe that this u-turn is just coincidence either  following hard on the heels of the justified criticism of both Louise Ellman and the Lord Chief Justice over the failures at level crossings down the years.
"NR is a public sector company and we must make sure that this move is not used merely to rob Peter to pay Paul and hike base salaries by large amounts. All these people are already handsomely rewarded  as it is and they each earned five times more than the Prime Minister last year."*
Total pay packages last year at NR:

Chief Exec, Sir David Higgins, £863,000 (basic salary £573,000);
Patrick Butcher, finance, £795,000 (basic salary £391,000);
Robin Gisby, operations, £778,000 (basic £368,000);
Simon Kirby, infrastructure, £768,000 (basic 368,000) and
Paul Plummer, strategy, £742,000(basic £346,000).

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