In the latter half of Control Period 4 (2009-14) it became clear that Network Rail faced serious Executive retention risks which threatened leadership continuity. Accordingly, at the company’s 2012 Annual General Meeting, Network Rail’s members agreed one-off performance related retention payments for three Executive Directors if they remained in post for the entirety of the Control Period. These retention payments were implemented when Network Rail was a private sector company limited by guarantee.
On 1 September Network Rail was reclassified to the public sector. As an arm’s-length public sector body, it must use public money proportionately and with probity and ensure that reward and remuneration do not go beyond what is needed to ensure sustained high performance. As part of new governance arrangements, Executive Director remuneration will be set by Network Rail’s Remuneration Committee but must be approved by the Secretary of State and the Chief Secretary to HM Treasury. Under the company’s remuneration policy for Control Period 5 (2014-19), no further retention payments can be awarded to serving Directors.