Network Rail was structured as a private company (to keep debts off the state balance sheet) and likes to pay its senior staff private sector-style remuneration.
Others point out that the track operator is owned by the taxpayer and receives a huge annual subsidy from the government. (And its £25.6bn of debt is guaranteed by the government). As such, its pay structure ought to be of interest to the public.
For the current year senior executives are not taking an annual bonus, after the previous year’s £2m-plus bonanza was heavily criticised by Philip Hammond, transport secretary.
At 1.30pm today NR will put its new bonus system to the vote of its 100 members (drawn from the public and the industry) at Millbank Tower. The proposed scheme will be more “long-term” than its previous system, as I reported earlier in the week.
A spokesman for the company refused to give the precise details of the new scheme, but someone else has helpfully provided a four-sheet briefing given to the members.
It confirms my story that part of the new bonus system will be based on five-year performance rather than three-year. Yet there will still be annual bonuses as well, albeit at up to 60 per cent of salary rather than the old 100 per cent.
Meanwhile the document suggests that pay may also have to rise to continue to recruit good candidates:
“Current experience would suggest that we are trailing the market by a considerable distance and that salaries may have to move to compensate from a significant tightening of our bonus, pension and contract terms.”
That suggests that the wider message of national austerity may not have reached the headquarters of Network Rail.
Jim Pickard
Kiran Stacey