Asked by: Lord Mann (Non-affiliated - Life peer)
Question to the Department for Transport:
To ask the Secretary of State for Transport, for what reasons retention bonuses have been paid to Network Rail executives; and what his policy is on the further payment of such bonuses.
Answered by Claire Perry
In the latter half of Control Period 4 (2009-14) it became clear that Network Rail faced serious Executive retention risks which threatened leadership continuity. Accordingly, at the company’s 2012 Annual General Meeting, Network Rail’s members agreed one-off performance related retention payments for three Executive Directors if they remained in post for the entirety of the Control Period. These retention payments were implemented when Network Rail was a private sector company limited by guarantee.
On 1 September Network Rail was reclassified to the public sector. As an arm’s-length public sector body, it must use public money proportionately and with probity and ensure that reward and remuneration do not go beyond what is needed to ensure sustained high performance. As part of new governance arrangements, Executive Director remuneration will be set by Network Rail’s Remuneration Committee but must be approved by the Secretary of State and the Chief Secretary to HM Treasury. Under the company’s remuneration policy for Control Period 5 (2014-19), no further retention payments can be awarded to serving Directors.
Asked by: Lord Mann (Non-affiliated - Life peer)
Question to the Department for Transport:
To ask the Secretary of State for Transport, if he will make it his policy that the remuneration of Network Rail executives should be reduced in response to the incidence of deaths on level crossings.
Answered by Stephen Hammond
I refer the Hon Member to my answer given today (UIN 193125).
Asked by: Lord Mann (Non-affiliated - Life peer)
Question to the Department for Transport:
To ask the Secretary of State for Transport, when he last attended a board meeting of Network Rail.
Answered by Stephen Hammond
The Secretary of State has not attended any meetings of Network Rail's Board. Network Rail is currently a private sector company limited by guarantee, which is accountable in the public interest through independent safety and economic regulation by the Office of Rail Regulation.
Asked by: Lord Mann (Non-affiliated - Life peer)
Question to the Department for Transport:
To ask the Secretary of State for Transport, with reference to the safety record of Network Rail, what his policy is on National Rail executives due to leave their posts receiving bonuses.
Answered by Stephen Hammond
Network Rail is currently a private sector company limited by guarantee, and the remuneration of its Executive Directors is a matter for its Remuneration Committee and Members. Under a condition of the company's network licence, it falls to the independent Office of Rail Regulation to ensure that Network Rail's bonus scheme framework is transparent, and rewards sustained and significant out-performance of the targets set for it.
With effect from 1 September 2014, Network Rail will be reclassified to the public sector. Work to decide on the best approach to governance, finance, and accounting and budgeting, including remuneration, has now begun. In advance of 1 September a Framework Agreement between the Department and Network Rail, which explains these decisions, will be published.