Rail bonus: minister votes no

When does a company sit up and realise that perhaps it can't get away with paying massive bonuses to executives while under-performing and letting its customers down?

If you're Network Rail you can stand up to all sorts of things that would have weaker companies buckling - an outcry in the press, questions in the House of Commons... they mean nothing to these bonus-hungry executives. But what if the Transport Secretary decides to come along to the AGM and vote against it?

"No" vote

That's just what Justine Greening has announced she intends to do. "I'm going to go to the meeting next Friday: I'm going to vote against them," she said on the BBC's Sunday Politics programme.

Network Rail is planning to give itself a bonus pool of £20 million. For chief executive, Sir David Higgins, this will mean close to £350,000 in bonus payments (in addition to a salary of more than £550,000). As far as the company is concerned, bonuses are a fact of life, and are paid every year, regardless of what else is going on inside the company.

Criticism

The company has faced its share of criticism over poor track conditions and health and safety issues. Last week it admitted health and safety breaches over the deaths of two girls killed at a level crossing in Essex.

There is currently a Commons motion being signed by a number of MPs, saying Network Rail had been "found by the Office of Rail Regulation to be in breach of its licence" and had been responsible for "major asset failures, congested routes and poor management of track condition".

There are those who argue that while these failures continue, no-one in the system should be waltzing away with the kinds of bonuses that should be reserved for those delivering an excellent service.

Impact

So will Greening's decision make a blind bit of difference?

She said she is just one vote at the AGM, as the government doesn't have the power to block bonuses. There has been some political toing and froing about whether this is completely true, with Labour saying the government has special powers and the government denying it. However, the government is quite clear that this vote is its best bet.

One vote is clearly not going to bring the bonus culture down. However, there's a chance that the discussion it has begun - which will undoubtedly continue at the AGM - may mean more of those attending are persuaded to vote against the bonus pool.

So where decent common sense, political pressure and anger have failed, there is the chance that a vote at the AGM could succeed.

So what do you think? Will the bonus culture be dealt a killer blow, or will executives always find a way to reward themselves handsomely for doing an average job?