Bonus payments to senior managers at owner of Britain’s rail network Network Rail Infrastructure should be based on their ability to make long-term management decisions, beat efficiency targets, and act accountably and transparently, according to rail regulators.
In a letter to Steve Russell, chairman of the remuneration committee at the Network Rail Infrastructure, the Office of Rail Regulation reiterated that its new management incentive plan should be based on three high-level objectives.
The regulator stipulated the primary focus should be to incentivise proven long-term sustainable delivery of all Network Rail’s performance and output obligations, while ensuring progress on efficiency, service culture, health and safety culture, risk control and asset management.
In addition, rewards should be proportioned to strongly incentivise senior managers to smash targets on efficiency, as well as encourage accountability and transparent dialogue with principal funders and members.
The letter stated: “Open and transparent dialogue with both principal funders and your members will enable you to explain how your new management incentive plan and the decisions you intend to take each year reflects the market you are in for executive talent and in particular the additional value created for the taxpayer and users of the railways (the wider public interest) that you are incentivising and ultimately rewarding.”
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