Bonus blow for Stagecoach boss after East Coast troubles

STAGECOACH executives have been stripped of bonuses totalling almost £800,000 following the “disappointing” nationalisation of the East Coast mainline.

Martin Griffiths, the chief executive, was in line for short-term incentives worth around £593,000, while finance director Ross Paterson was due to be paid an extra £395,000 under Stagecoach’s annual bonus programme.

The FTSE 250 company’s remuneration committee “exercised discretion”, reversing agreed policies which would have allowed the pair to take home bonuses of 91pc of basic salary.

Mr Griffiths received no bonus, and Mr Paterson was paid £198,000 on top of his £435,000 basic wage. Mr Griffiths’ total pay fell from £1.3m to £987,000, while Mr Paterson’s rose from £811,000 to £867,000.

The East Coast mainline, a joint venture led by Stagecoach and operating in conjunction with Virgin Trains, was handed back to the Government on June 24. Chris Grayling, the Transport Secretary, said the operators had “got their bid wrong”, overestimating how profitable the line would be.

Stagecoach announced in June it would take an £85.6m hit from the failure of the East Coast franchise – in which it owned a 90pc stake. Mr Griffiths blamed a “very different” economic and political outlook. However, he insisted private companies should deliver rail services; it worked for “government and shareholders”, he said.

Stagecoach is one of three bidders vying for the Southeastern franchise, which will be awarded next month. It is up against Govia, as well as a bid led by Abellio with East Japan Railway and Mitsui & Co.