Network Rail gets backing for bonuses despite PM's opposition

The Prime Minister's spokesman expressed dismay last night after Network Rail, the not-for-profit company that runs Britain's railways infrastructure, won approval for controversial six-figure bonuses for many of its senior executives.

The bonuses, which include a £641,000 payment to Iain Coucher, Network Rail's chief executive, were announced last month, but had to be approved at a meeting of the company's ruling body yesterday. While 31 Network Rail members voted against the awards, with a further nine abstentions, the company received 37 voters in favour.

"The Prime Minister said at the time that he was deeply disappointed [by the bonus awards]," said David Cameron's spokesman. "Now they have voted for those bonuses and his view remains the same."

In addition to the payment to Mr Coucher, five other Network Rail directors will receive bonuses worth more than £100,000, with the total value of the awards coming to £2.35m. Peter Henderson, asset management director, stands to receive £460,000.

The payments have attracted huge criticism amid complaints about the mixed performance of Network Rail, particularly around the punctuality of train services.

Moreover, while the company is technically private, it does not pay any dividends and is subsidised by the Government. In the context of huge public spending cuts, the bonuses have been seen as insensitive.

However, Network Rail's chairman, Rick Haythornthwaite, who has consistently defended the contractual bonuses awarded to the directors, said last night that his view had prevailed after a "healthy debate". He insisted: "Shareholders have held the board to account, demonstrating the value of their role."

Mr Haythornthwaite faced considerable opposition at the meeting, with one member warning that the bonus payments had already done Network Rail "significant reputational damage". Gerry Doherty, head of the TSSA trade union, added: "The public members have inflicted a moral defeat on Iain Coucher and his cronies with fewer than half of them voting in favour of these outrageous bonuses."

Mr Doherty's union organised a noisy protest outside the meeting in Manchester, with members dressed in Highland gear and playing the bagpipes, a reference to the property that Mr Coucher owns in Scotland.