Another week, another executive in the line of fire over their bonus. This week it is Sir David Higgins, the plain-speaking Australian in charge of Network Rail, which manages the country’s rail infrastructure.
NR members are about to vote on the pay structure under which executives will be allocated their bonuses later this year. The scheme could see Sir David pocket a £340,000 annual bonus (plus much more in long-term incentives), which has triggered anger given the company’s declining performance.
Justine Greening has now said she will become the first transport secretary in the company’s ten-year history to get involved with its administration when she attends a meeting to vote against the scheme.
But before she does so (in comments made, in fact, before the whole controversy blew up), Sir David has got his retaliation in first.
To say we are going to politicise the process before it’s even gone through, you might as well wipe out the bonus process, and then how are you going to attract and retain the right people?
Industry insiders say Sir David has done a good job at the head of the company, but to many voters the plea to pay enough to “retain the right people” will look like the kind of special pleading regularly employed by bank bosses.
But Sir David is right that this level of political interference is unprecedented for the company, and may change the basis on which it operates for good.
Friday’s meeting of NR members promises to be fascinating. Lord Berkeley, the Labour peer who is known for making trouble for the company, had previously said he would vote to change the bonus cap from 60 per cent of salaries to 30 per cent. Given Greening’s decision, he has now decided to drop that proposal and back the government’s position of voting against all bonuses.
For now, the company is remaining quiet – when contacted over the weekend to see if Sir David wanted to add to his comments in the light of the fresh controversy, he declined.
Jim Pickard
Kiran Stacey