The Transport Secretary is to vote against Network Rail’s £20 million bonus pool, but Labour argues that she is not utilising her powers to prevent the payouts.
Justine Greening has vowed to attend the annual general meeting (AGM) of the rail infrastructure firm to veto the reward package which may include £340,000 for Chief Executive, Sir David Higgins, on top of his annual wage of £560,000.
Pay proposals, to be announced at the AGM, would see the limit of annual rewards set at 60 per cent of annual salary. However, long-term bonuses would be permitted to pay up to 500 per cent after a five-year period.
Greening told the BBC’s Sunday Politics programme: “The governance structure that the last Government set up means that I can go and vote against it. The problem we have got is that will not actually change the result.”
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The culture of bonuses for the executive team at the company has long been in place. In recent years it has faced criticism for poor track conditions and its safety history, it is hoped that Greening’s action will put pressure on the organisation to scale down the level of bonuses.
Shadow Transport Secretary, Maria Eagle however, claims that the Department for Transport does have power over pay packages due to its position as a “special member” at Network Rail. She argued that ministerial approval was required for changes to incentive programmes.
The rail group’s six executive directors also stand to share up to £15.6 million over the course of the next three years from a long-term remuneration scheme.
