Regulator comments on Network Rail's bonus announcement

26 June 2009
ORR/16/09

The Office of Rail Regulation (ORR) today responds to the decision by Network Rail’s remuneration committee on bonus payments for the company’s senior executives.

The committee has decided not to exercise its considerable discretion to reduce bonuses below the potential annual award of 49.3% of basic salary. We are surprised and disappointed by the committee’s decision.

Bill Emery, ORR’s chief executive said: “We are surprised and disappointed that Network Rail’s non-executive directors decided not to exercise their discretion to reduce significantly the bonuses for its senior executives, reflecting the mixed performance of the company during the last year and the economic climate that is facing many of its customers and suppliers.

The committee has provided details of its reasons, but we don’t find them compelling, and nor do we believe the decision will gain widespread stakeholder support."

Notes to editors

  1. A letter from Bill Emery to Jim Cornell, chairman of Network Rail’s remuneration committee, on ORR’s assessment of Network Rail’s performance in 2008-09 was sent on 13 May 2009 and is available on our website: http://www.rail-reg.gov.uk/upload/pdf/let-NR_remcom_0809_perf.pdf
  2. Network Rail’s network licence requires the company to publish a statement setting out how the level of remuneration of the executive directors has been determined. The statement must have regard to ORR’s assessment of the company’s performance. The statement is contained in NR’s 2008-09 annual report available on their website.
  3. Network Rail’s remuneration committee comprises all the non-executive board members.

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