Remuneration committee chair rejects comparisons with controversial bank bonuses, in letter seen by Times
Jim Cornell, the chairman of Network Rail's remuneration committee, has written a strong defence of its bonus scheme, according to the Times.
The newspaper claims to have seen a four-page letter received by 104 members of the rail company's supervisory panel rejecting comparisons with the bonuses paid by banks and other companies rescued by the taxpayer.
Last year, Network Rail chief executive Ian Coucher received two bonuses, almost doubling his total earnings to £1.24m.
In the letter, Cornell is said to have written: “We need to recognise the importance of continuing to motivate all within the company to meet and exceed the challenges ahead.
“To my mind the debate on awards for 2008/09 needs to recognise that the management incentive plan has been designed to contain the checks and balances to reward only success within very demanding regulatory outputs. Failure to achieve improved performance each year is not rewarded.”
He said that Network Rail had improved its performance in all key areas and that the bonus scheme was an important aspect of the incentives on executive directors to achieve future goals.
Network Rail is a public interest company, which was founded to replace Railtrack after its collapse in 2001. It has £20bn debt guaranteed by the taxpayer.