Network Rail has revealed that former chief executive Iain Coucher left with a £1M severance package as it unveiled a 10% rise in profit in its annual results.
Coucher, who stepped down from his post last year, received total compensation package of £1,075,000, which included payment of 12 months salary in lieu and £370,000 in bonuses.
The rail infrastructure operator posted a turnover of £5.7bn – up marginally compared to the previous year – and recorded £438M in pre-tax profit for the financial year ending 31 March 2011.
None of Network Rail’s executive board, including new chief executive David Higgins, was awarded bonuses this financial year as the previous reward scheme has been scrapped and maximum payouts reduced by 40%.
An alternative system, which will see directors paid bonuses at the end of each five year Control Period is now in place.
On the back of the results chairman Rick Haythornthwaite offered praise for Coucher, whose tenure at Network Rail was dogged by criticism of his salary and bonuses.
Haythornthwaite said: “I would like to pay tribute to Iain Coucher for the very substantial role that he played in the turnaround of Britain’s railways. It is easy to forget the grim situation faced by Network Rail back in 2002 with poor performance, a poor safety record and the trust and reputation of the industry in tatters. We now have a far better performing, safer railway with more numerous and more satisfied passengers than ever before.’
The leader of the Transport Salaried Staffs’ Association Gerry Doherty was highly critical of Coucher’s final remuneration package and branded his tenure as a failure.
He said: “[Coucher] earned over £8M, thanks to a generous bonus scheme he helped set up, while the fare payer now pays twice as much for a ticket as passengers in the rest of Europe.
“Not only do we have highest fares in Europe, NR is 40% less efficient than other European railways despite having received over £30bn of taxpayer support while Coucher was running the network.
“He quit last year after yet another row over his bonus payments and amid questions about his pay and perks. He should not have recieved any pay off at all, let alone £1M.
“He has been rewarded for failure on a grand scale. NR’s claim to only reward success is pure poppycock.”
Network rail said it had cut the cost of running the UK’s railways by £400M in real terms although its net debt – at 31 March 2011 – had risen to £25bn from £23.8bn in the previous year.