Network Rail bonuses given the thumbs up
The body charged with holding Network Rail to account has supported controversial bonus packages.
Despite criticism from industry regulators, at the rail infrastructure company's annual meeting yesterday 71 per cent of members approved directors' remuneration, reports the Financial Times.
Network Rail's members are rail industry figures and members of the public who take the place of shareholders at the company, which has no shareholders but is limited by government guarantee.
Votes on executive pay had been expected to be close this year after the Office of Rail Regulation, the company's regulator, criticised the generosity of payouts.
Peter Henderson, group infrastructure director, will receive £329,000 in bonuses on top of his £434,000 pay, while Ron Henderson, finance director, is set to get £319,000 bonuses on top of his £413,000 pay.
However, Iain Coucher, chief executive, is forgoing his bonus, but will still receive £150,000 under the long-term incentive plan. The bonus approval was met with unions protesting outside the meeting, who questioned management skills.
The news comes as investment banking giant Morgan Stanley said it had set aside 72 per cent of revenue from the past three months to pay bonuses.
Do you agree with the bonuses?
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Before commenting on whether the bonuses are acceptable I think I would need to see the details of how the bonuses were set. Same applies to the Morgan Stanley article although I understand they just posted a $1.2b loss!
I dare say that some targets for punctuality etc. will have been set and reached. What I find hard to fathom though is how the railways lose as much money as they do. Most of the trains I get on are very busy indeed and user numbers seem to be going up each year. Tickets are incredibly expensive. So with high numbers + expensive tickets, how on earth can they be losing money?
I think, at best, the offering of financial incentives to achieve targets is unimaginative and at worst, can have a negative effect on the employees and ultimately the company and it's customers.
Bonuses make an assumption about the people applying for or doing the job - a big broad brushstroke which says [i]"you're motivated only by money and the pursuit of same"[/i], which is quite probably grossly inaccurate.
The salaries quoted are substantial, so it cannot be argued that bonuses are required to motivate or to form part of a pay structure to achieve a basic standard of living.