Network Rail chiefs abandon bonuses
By Oliver Hotham
Network Rail's bosses have decided to waive their bonuses this year, ahead of what would have been a damaging board meeting on Friday.
Transport secretary Justine Greening's threat to vote against bonuses at the now-postponed meeting on Friday succeeded in forcing a climb-down from the board, which this afternoon said it would "reflect further on how to incentivise performance in the company".
Chief executive of the state-owned company, David Higgins, who was eligible for a bonus of up to £340,000, announced: "I and my directors decided last week that we would forego any entitlement and instead allocate the money to the safety improvement fund for level crossings. I can confirm that remains our intention."
Both the government and the opposition had expressed criticism of the potential for bonuses at Network Rail after the recent bonus row at the Royal Bank of Scotland.
The Labour Party had claimed bonuses cannot be justified given the company's performance and argued that the government could intervene to stop the board approving them.
The Shadow Transport Secretary Maria Eagle MP responded to the news by saying: "it was completely wrong for bonuses of this scale to have been even considered, let alone agreed" and demanded the government "sit down with Network Rail to agree a way forward on the remuneration of senior managers, including whether a bonus scheme of this scale is really appropriate in a company funded by the taxpayer".
Network Rail, which is wholly owned by the taxpayer but operates at arm's-length from the government, announced that discussion of bonuses "would only arise if Network Rail surpassed stretching performance thresholds and would only be decided in May after the end of the financial year".
Political pressure on Network Rail had heightened since the controversy over bonuses at taxpayer-owned Royal Bank of Scotland.