Decisions on the remuneration and incentivisation of Network Rail’s executives are a matter for Network Rail’s independent remuneration committee. Bonuses are determined against key performance indicator targets set by the independent Office of Regulation (ORR) in accordance with condition 28 of Network Rail’s network licence. The terms of Network Rail’s management incentive policy can be modified only with the consent of the Office of Rail Regulation.
As part of the ORR’s Periodic Review 2008 Final Determinations, the ORR announced on 19 December proposed changes to Network Rail’s network licence to strengthen the company’s accountability. These will require Network Rail’s remuneration committee to be more transparent in its executive bonus decision-making process; and to explain how it has taken into account input from third parties such as the ORR.