Rail firm accused of 'emotional blackmail' over bonuses

A rail union today accused Network Rail (NR) of resorting to "emotional blackmail" to ensure six-figure bonuses for the company's top directors are approved at an annual meeting tomorrow.

NR has no shareholders but has around 100 "members", including members of the public, who hold the company's board to account.

The new Government is considering changes to the NR members' structure and today Gerry Doherty, leader of the TSSA union, said NR had effectively told public members that if they voted for the bonuses the board would fight for their existence in a restructured company.

NR top directors got bonuses totalling around £2.25 million this year, with chief executive Iain Coucher, who is on a salary of £613,000, getting an annual bonus of £348,000, plus £293,000 from a management incentive scheme.

The bonuses were announced after Transport Secretary Philip Hammond had written to NR chairman Rick Haythornthwaite urging restraint.

Mr Hammond said top NR directors were already "handsomely rewarded in terms of annual salary" and he spoke of the "potential for damage to the company's reputation" should big bonuses be paid.

Today Mr Doherty produced extracts from a letter he said Mr Haythornthwaite had written to the public members ahead of tomorrow's annual meeting.

Mr Doherty said: "This letter is a crude attempt at emotional blackmail in defence of the indefensible."

According to Mr Doherty, the letter spoke of the NR board's decisions possibly not being "understood or appreciated in some quarters". but that they were the "most appropriate in the circumstances".

The letter also talked of the "the stream of commentary (often ill-informed and possibly with alternative agendas)" that had come the board's way.

According to Mr Doherty, the letter said public members should approach the annual meeting "offering the best possible advertisement for the members' governance model".

It went on: "Arguably, this points to votes cast at the meeting on a holistic, impartial and informed understanding of the board's decision rationales."

Mr Doherty said: "Strip away all the verbiage and this is a classic old-fashioned deal - 'You scratch our backs and we will scratch yours'.

"The members should treat this letter with the contempt it deserves. They should put the country first and throw these bonuses out. They cannot be justified on economic or moral grounds. It is time to halt this gravy train."