Tuesday, 7 February 2012

Captain Deltic's bonus bashing quiz

Captain Deltic asks "Who said this and when?"...

But Network Rail's remuneration committee still allowed substantial bonuses this year despite a formal letter warning that performance had been mixed. All the regulator could do was to say that he was "surprised and disappointed".

Under a Conservative Government, if the regulator is disappointed, the senior management will feel it. We will give the regulator the power to inflict real financial pain on Network Rail via the confiscation of reduction of bonuses in cases of serious under-performance.

At present, Network Rail's senior management is theoretically accountable to "members" who are supposed to function like the shareholders of a public limited company. In reality they do no such thing. The senior management can get away with scooping the bonus pool because an amorphous grouping of 100 members, the appointment of which can be vetoed by the very management team they are supposed to scrutinise, simply aren't strong enough to stop them.

So a further measure a Conservative Government would adopt to give Network Rail much stronger incentives to respond to their customers is reform of the company's governance.

We will streamline and shrink the membership to turn it into a supervisory board. We will ensure that members will be appointed independently of Network Rail's management.

And we will make sure we have people on it who will provide a strong voice for passengers and for train and freight operators, in setting the overall direction of the company and holding its management to account.

And, in addition, we will inject more contestability into areas of Network Rail's remit. At present, the company has an almost complete monopoly over publicly funded rail improvements.

Clue: It's not just promises that get broken.

UPDATE: This from The Archer...

I’m feeling pedantic so I’ll point out that no promises were broken as we don’t have a Conservative Government.

As I'm sure members of the 1922 Committee will be only too pleased to confirm...