Home Business Network Rail Rejects Bonuses to Bank Executives in Liu of Safety Measures

Network Rail Rejects Bonuses to Bank Executives in Liu of Safety Measures

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Network Rail Rejects Bonuses
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Over the past year, many people have been increasingly upset over large bonuses paid to the executives at large banks. As the banks decline in profitability, they have continued to pay large bonuses to the executives leading the company. However, those banks appear to have finally started cutting back on the bonuses they’ve been paying out.

Last week, Fred Goodwin was stripped of his knighthood over bonuses were offered to executives after his company posted a significant loss. Ultimately, the Royal Bank of Scotland needed the largest bailout in the history of the United Kingdom.

The Network Rail was another major institution that intended to offer large bonuses to their executives but has since retracted them. Earlier this week, Network Rail announced they would be retracting £20 million in executive bonuses. According to the terms of the executive compensation package, the executives are eligible to receive up to 60 percent of their annual salaries each year in bonuses.

However, although the executives were eligible for these bonuses, no bonus is guaranteed or was agreed upon. The Network Rail has found more useful means of using the funds available. The company said that it intends to spend more money on safety programs.

The executives will not receive any bonuses this year. In subsequent years, they will be forced to negotiate a new package.

As political pressure increases, the executives are likely to receive a significantly lower compensation in the coming years. Justine Greening, transport secretary, said that she will be attending Network Rail’s meeting this coming Friday. Greening hopes she will be able to influence the bonus package they will be offering in the future and hopes to discourage them from issuing any bonuses anytime shortly.

The government said that the company is facing additional regulatory issues. Two months ago, they were also sent a notice from the Department of Rail and Transit, which reprimanded them for failing to arrive at their scheduled locations promptly.

As the government, shareholders, and general public become more irate over the future of executive bonuses in the country, stricter policies over executive bonuses are becoming increasingly likely. These bonuses will likely become far less generous in the coming months and executives will likely be forced to work harder to earn them.

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