Department of Transport

Sir George welcomes announcement on Railtrack directors' pay

date 6 September 1995   source Department of Transport   type Press release

Transport Secretary, Sir George Young, welcomed today's announcement
by Railtrack Chairman, Bob Horton about Railtrack's policy on
executive pay after the company's privatisation.

Railtrack have confirmed that share options will not be part of their
remuneration policy after privatisation. Bob Horton also emphasised
that future increases in directors' pay must reflect the performance
of the company and be felt fair by the workforce as a whole.
Railtrack said that they would make a full statement on their pay
proposals at a later date, but made clear that their arrangements
would adhere to the Greenbury code.

Sir George Young said:

"The Government recognises the importance of a clear and fair policy
on directors' pay; and has reflected this in preparing Railtrack for
privatisation. Bob Horton's announcement is a step forward in this
process. It makes clear that we are creating a climate in which
achievement is appropriately and fairly rewarded, but where
performance - including quality of service - is clearly the key to
future pay levels.

"I am sure that this positive move to set out Railtrack's policy of
continuing its high standards of corporate governance will be widely
welcomed."

Railtrack's statement also drew attention to the fact that they have
asked their advisers to make recommendations on share based
participation arrangement for the workforce as a whole.

Sir George commented:

"I am also pleased to see that Railtrack are developing proposals for
share participation for staff as a whole. This will ensure that the
benefits of good performance can spread throughout the company."

Notes to editors

1.A copy of the Railtrack chairman's statement on executive pay after
privatisation is attached.


ANNOUNCEMENT ON RAILTRACK DIRECTORS' PAY

You will have noted that, by publishing full details of executive
emoluments in this year's annual accounts, Railtrack adopts high
standards in its corporate governance in the area of director
remuneration. It is our policy to continue this in future years.

In the light of the recommendations of the Greenbury report and
following discussions with the Secretary of State for Transport, my
Board has decided that share options will not be part of our
directors' remuneration policy. We do, however, believe that a long
term incentive scheme, aligning directors' and shareholders'
interests is important to the future prosperity of the business. We
have asked our advisers to make recommendations on the form such a
scheme should take. I have also asked that they make recommendations
on share based participation arrangements for the workforce as a
whole. I shall make a full statement on these schemes at a later
date, but the arrangements will adhere to the Greenbury code.

I am also very conscious of public concern about the wider issues of
executive remuneration. Whilst we must ensure that our remuneration
policies allow us to attract and retain key staff at all levels, my
Board is clear that future increases in directors' pay must reflect
the performance of the company and be felt fair by the workforce as a
whole. I shall be making a full statement on directors' remuneration
prior to flotation.

Railnews Archive ::: 1995-09-06 DoT-001

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