AGM postponed as Network Rail chief executive pledges money to level crossing safety fund
Network Rail chief executive David Higgins has waived a proposed £340,000 bonus following growing prssure over excessive bonuses paid to senior executives.
In a statement Higgins said that all Network Rail directors had decided to pledge their bonus entitlements, reportedly worth £16m over three years, to a safety improvement fund for level crossings.
The rail network operator, one of the construction sector’s biggest clients, also said that it had postponed its annual general meeting (AGM)scheduled for Friday amidst the growing furore over executive pay.
The decision follows the announcement by transport secretary Justine Greening yesterday that she was planning to vote against the £340,000 bonus for Higgins at the AGM.
However, Greening stopped short of saying she would intervene to block Higgins’ bonus, which comes on top of a £560,000 basic salary and is part of a reported £20m bonus pool for senior Network Rail staff. Greening was only told of Network Rail’s decision to postpone the AGM this morning.
Higgins, formerly chief executive of the Olympic Delivery Authority, has come under increasing fire since the size of his proposed bonus was revealed last week, in the wake of the furore surrounding the bonus payment to the chief executive of the Royal Bank of Scotland.
Network Rail said in a statement: “The board of Network Rail has decided to recommend to its members that this Friday’s meeting be adjourned. The board will take the opportunity to reflect further on how to incentivise performance in the company against the backdrop of the current context.”
David Higgins said: “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.”
UK railway track operator Network Rail is incorporated as a “not for dividend” private company in which the government is an influential shareholder through a unique “member” governance structure.
Greening, speaking on the BBC’s Sunday Politics show, said: “I’m going to go to the meeting next Friday, I’m going to vote against them. The governance structure that the last government set up means I can go and vote against it. The problem we have got is that won’t actually change the result.”
However, Maria Eagle, the shadow transport secretary, said: “Greening is wrong to say that she cannot block these bonuses … It is difficult to see why Network Rail would have felt able to propose this new bonus package without knowing if it had ministerial backing.”