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Network Rail bonuses on hold
while scheme reviewed
by Katie Silvester
An annual bonus will not be
paid to Network Rail’s executive
directors for the financial year
2010-11, the organisation has
announced.
Steve Russell, chairman of
Network Rail’s remuneration
committee said: ‘Last year, the
board suspended the management
incentive framework for
executive directors and, after
a comprehensive review, will
shortly be proposing to members
a radically different approach
to incentivisation from 2011-12
onwards, including transitional
arrangements from extant long
term incentive plans to the new
scheme.’
Gerry Doherty
The subject of directors’
bonuses at Network Rail has
always been controversial, with the
six executive directors taking home
more than £2m between them in
bonuses alone for the year 2009-10.
That was on top of their
already generous salaries, which
range between about £300,000 and
more than £600,000 – way above
what any MP earns, including
the prime minister whose
parliamentary earnings are just
£142,000, excluding expenses.
Russell added: ‘We intend
to retain the past arrangements
for the annual incentive scheme
across all other employee grades
for 2010-11, based on challenging
targets that were established at the
beginning of the year.’
Speaking on behalf of the
directors and the committee, he
added: ‘All recognise that the
public expect consistently high
network reliability and overall
service delivery within a strong
safety culture before the top
leadership of the company should
become eligible for payment under
any annual incentive scheme.’
Rail union TSSA would like
Network Rail to abandon its bonus
scheme for good, but the new
CEO David Higgins has already
indicated that he supports the idea
of bonuses in principle.
TSSA leader Gerry Doherty
said that Network Rail needed to
improve its safety record before
bonuses were reinstated. He
referred to its under-reporting of
accidents – which was the subject
of an RSSB report – and the
Elsenham level crossing tragedy.
‘We would like to see these
safety questions being addressed
seriously before Mr Higgins starts
talking about paying himself huge
bonuses of £600,000 a year like his
little lamented predecessor Iain
Coucher, he said.
‘Mr Higgins has repeated
the old line that NR is a private
company to justify the huge
bonuses. He fails to mention that
we the taxpayers fund it almost
entirely with £4bn of our money
every year.’
■ katie.silvester@railpro.co.uk
■ See page 29 for Atoc’s proposal
about breaking Network Rail
into separate companies
News in brief
Unions warn of
redundancies
London Midland is considering
closing some of its ticket offi ces
and restricting the opening
hours of others. The RMT and
TSSA say this would mean up
to 122 posts being cut. London
Midland has issued launched a
consultation on the closures.
Private sector rail
investment falls short
A lack of private sector funding
has seen government targets for
rail spending fall short by around
£16bn, says a report by analysts
TAS. The 2001 Ten Year Plan for
transport envisaged £31bn of
private sector investment over
the following decade, but only
half of that materialised.
Customers would like
to set up own Tocs
Passengers would be willing to
invest in a rail operator that was
passenger-owned if that meant
cheaper tickets and improved
customer service. The survey,
by Co-operatives UK, found that
regular commuters would invest
as much as £900 in such a
company.
www.railimages.co.uk
Station retailing outguns high street
Retailers at railway stations
outperformed their counterparts
on the high street in the fourth
quarter of 2010, with five per
London Victoria station
cent growth on the previous
year, compared to less than one
per cent growth on the high
street.
The previous quarter also
saw five per cent growth. The
figures are based on the results
of retailers operating at the 17
stations operated by Network
Rail, with London Euston (up
13.51 per cent), Birmingham
New Street (up 12.85 per cent)
and London Bridge (up 11.20 per
cent) seeing the most growth.
Food and grocery outlets were
the most successful, followed by
clothing and accessories.
Network Rail’s head of retail
Gavin McKechnie said: ‘Whilst
the high street shivers in the
cold economic climate, rail
passenger journey numbers
remain high at 1.3bn a year – the
highest number for 70 years.
‘Retailers at our stations
benefit from these high
passenger numbers and from an
upmarket demographic who are
keen on impulse shopping.’
Revenue management
system boosts East
Coast’s ticket sales
■Annual ticket sales at East
Coast have been boosted by
£4m a year, thanks to its revenue
management system, says head of
revenue Suzanne Donnelly.
The system allows the company
to gauge on which trains to offer
the biggest discounts and how
many discounted tickets to make
available, enabling it to attract
passengers onto the quietest
trains, while not discounting
unnecessarily on the more popular
services.
‘With three-quarters of
passengers booking in advance,
we’re able to analyse demand data,
as well as monitor and understand
our customers’ behaviour to
accurately price our seats and
encourage passengers to travel on
less high-demand services,’ said
Donnelly.
East Coast uses JDA Rail Price
Manager.
APRIL 2011 PAGE 11