Media centre

Monday 3 Mar 2003

NETWORK RAIL LINKS EXECUTIVE PAY TO PERFORMANCE IMPROVEMENTS

Region & Route:

National

Network Rail, the ‘not for dividend’ successor to Railtrack, today unveiled demanding performance targets which link executive pay to improvements in rail services.  The Management Incentive Plan (MIP) ensures that senior executives will only receive bonus payments if real benefits for the travelling public are delivered. Network Rail is a company limited by guarantee with Members instead of shareholders and so the question of putting shareholders interests before those of passengers does not arise.  The new Management Incentive Plan is specifically designed to align executive remuneration with the interests of rail users; their interests will be identical. The Management Incentive Plan for next year will be reviewed in conjunction with the forthcoming business plan and will include a long term incentive mechanism. Ian McAllister, Chairman of Network Rail, says: “This incentive plan will reward senior executives only if they deliver significant improvements in rail network performance.  If performance does not improve, there will be no bonus payments. “This scheme directly links executive pay to success in meeting three key challenges facing the rail industry – improving performance, tackling costs and delivering our vision of engineering excellence. “It is essential that Network Rail is able to attract and retain senior executives of the highest calibre.  That means we have to be able to remunerate them accordingly but only if the travelling public enjoy a measurably better rail network.”