JARVIS has paid its disgraced directors bonuses that were withheld in the wake of the fatal Potters Bar rail crash that killed seven people.
The troubled support services company admitted yesterday that it had paid £807,000 in retrospective bonuses, despite the fact that Jarvis has still not been cleared of responsibility for the accident in Hertfordshire in May 2002.
Paris Moayedi, the chief executive at the time of the accident who has since resigned from the board, gained £260,000 as a result of the remuneration committee’s decision to award the bonuses.
Kevin Hyde, the present chief executive and the only one of six directors who remains with the company, picked up £137,000.
The company infuriated families caught up in the tragedy when it paid performance-related bonuses to Mr Moayedi, weeks after the crash. After that public relations disaster, Colin Skellett, then chairman of the support services group, pledged that no bonuses would be paid to directors until the cause of the crash was known.
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The issue of the outstanding bonuses is understood to have been brought before the remuneration committee as part of the negotiations over Mr Moayedi’s departure.
A spokesman for Jarvis said that the company was contractually obliged to pay the bonuses and had been advised by its lawyers to do so.
“The decision to give time to assess whether the Potters Bar tragedy would call into question the performance of the directors was right and proper at the time. In the year in question, the performance targets for some of directors were achieved and accordingly the contractual entitlement existed. The decision came more than 18 months after the accident, and after three Health and Safety Executive (HSE) reports, none of which has suggested that there has been any systemic failure of management.”
Jarvis was responsible for maintaining the section of track where the accident happened. Three HSE investigations have failed to find the cause of the accident, but the most recent report said that poor maintenance was the most likely cause. It ruled out sabotage, a theory promoted by Jarvis.
This year Jarvis admitted joint liability for compensation with Network Rail. It has not admitted responsibility for the incident.
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The company, which was worth £619 million at the time of the crash, is now worth just £57 million after a string of profits warnings and problems with its Private Finance Initiative business. It has since handed back all its maintenance work to Network Rail.
A spokesman for Network Rail confirmed that a final HSE report on the cause of the accident was outstanding. British Transport Police are still investigating the crash.
The payment of performance-related bonuses for 2002 was revealed in Jarvis’s annual report, which also shows that Mr Moayedi received a pay-off of £585,000.
Mr Moayedi handed chairmanship of the company to Steven Norris, the failed Tory London mayoral candidate.