Rail fat cats' happy new year: Bosses line up multi-million pound pay deals as passengers face inflation-busting fare rises, delayed trains and strike misery

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Rail bosses are in line to receive multimillion-pound pay packages this year, as passengers face inflation-busting fare hikes, delays and strikes.

A Daily Mail investigation reveals some executives could earn as much as £5.4million despite a year plagued by engineering works, poor service and the worst strike disruption in decades.

Tomorrow, passengers will be hit by an average fare increase of 3.4 per cent – the biggest in five years. It will add hundreds of pounds to the cost of some season tickets.

Travellers buying off-peak fares or planning long journeys could be hit by even bigger rises – up to 10 per cent in some cases.

Despite this, the bosses that run Britain's biggest rail franchises are set to earn huge seven-figure packages.

A Daily Mail investigation reveals some executives could earn as much as £5.4million despite a year plagued by engineering works, poor service and the worst strike disruption in decades

Last night, MPs and campaigners called for action to rein in pay and curb fare increases. The row came as:

• Rail passengers faced more travel chaos on New Year's Eve after the RMT union staged yet another strike on South Western Railway and CrossCountry;

• An investigation revealed 48 per cent of all trains in the five weeks before Christmas were either late or cancelled;

• Government figures revealed a slump in the sale of rail season tickets to a seven-year low amid spiralling fares;

• A study said trains on Britain's railways are a record 21 years old on average, with some built in the 1970s.

The bumper pay deals for 2017/18 include a package worth up to £2million for Great Western Railway's Tim O'Toole and up to £2.5million for Martin Griffiths, boss of Stagecoach, which runs East Midlands and part-owns the Virgin East Coast and West Coast franchise.

Rupert Soames, chief executive of Serco, which operates the Caledonian Sleeper and part controls Merseyrail, is in line for a maximum pay package of up to £5.4million if he hits all his performance targets.

The bumper pay deals for 2017/18 include a package worth up to £2million for Great Western Railway's Tim O'Toole (right) and up to £2.5million for Martin Griffiths (left), boss of Stagecoach, which runs East Midlands and part-owns the Virgin East Coast and West Coast franchise

Steve Double, Tory member of the Commons transport committee, said: 'I would expect some restraint … in terms of fare rises. 

These executives need to be responsible and their pay needs to reflect the level of service they are delivering.'

Labour MP John Mann, of the Treasury committee, added that it was 'first-class rewards all the way for railway bosses … waiting rooms and extortionate fares for long-suffering passengers.'

Stephen Joseph, of the Campaign for Better Transport, described the rail industry as a 'gravy train', adding: 'It's not much of a happy New Year for rail passengers who are facing the highest fares rise for five years.'

Commuter groups and opposition MPs are planning protests over fare hikes at stations across the country tomorrow.

Since the start of the decade, ticket prices have soared at almost double the pace of wages, but this year's rise is the biggest since the start of 2013. 

Rupert Soames (left), chief executive of Serco, which operates the Caledonian Sleeper and part controls Merseyrail, is in line for a maximum pay package of up to £5.4million if he hits all his performance targets, while David Brown, chief executive of Go-Ahead, whose railway arm Govia holds franchises including the beleaguered Southern franchise, received £801,000 in 2016/17

Overall, fares are going up by 3.4 per cent on average, according to the rail regulator.

Regulated fares, such as season tickets, are rising by up to 3.6 per cent in line with the RPI measure of inflation for July. 

This is controversial because the more commonly used CPI inflation index is only 2.8 per cent.

The hike will push up the cost of a season ticket from Gillingham in Kent to London by £188 to £5,412, while workers commuting from Swindon to London will see their fare rise £304 to £8,740.

The increases in unregulated fares, such as off-peak leisure tickets, are set by the rail companies.

The bumper pay deals for 2017/18 include a package worth up to £2million for Great Western Railway's Tim O'Toole and up to £2.5million for Martin Griffiths, boss of Stagecoach, which runs East Midlands and part-owns the Virgin East Coast (pictured) and West Coast franchise

An off-peak standard return from London Paddington to Slough with Great Western is set to rise by 9.4 per cent in January to £10.50, according to analysis from watchdog Transport Focus. 

A return from London to Plymouth – also with Great Western – will rise by £10.70 or 8.8 per cent to £132.70.

The average 3.4 per cent increase across all tickets will mean rail fares have surged by 29 per cent since January 2010. Average wages have risen by just 16 per cent since then, according to the Office for National Statistics.

But while fares for travellers soar, accounts show that Britain's rail bosses are enjoying huge remuneration packages.

One of the biggest earners is Martin Griffiths, chief executive of Stagecoach, whose basic salary, pension and benefits package for 2017/18 is £892,000 – but could rise to a maximum of £2.5million if performance targets are met.

In 2016/17, he received £1.3million, including a £302,000 bonus. His firm operates the East Midlands franchise which is increasing the price of an anytime return from London to Derby, by £12.50 or 6.9 per cent to £194.50.

Rupert Soames, chief executive of Serco, which operates the Caledonian Sleeper and part controls Merseyrail, is in line for a maximum pay package of up to £5.4million if he hits all his performance targets

Meanwhile, Serco's Rupert Soames – Sir Winston Churchill's grandson – will receive a minimum of £1.13million for the 2017 calendar year and could receive almost £5.4million if maximum performance targets are met.

In 2016, he was paid £2.2million in salary, bonus, pension and other perks.

Tim O'Toole, chief executive of First Group which holds the Great Western franchise, received an annual package of £1.26million in 2016/17 including a basic salary of £846,000. 

He did not receive a bonus but his pay has still surged by more than a fifth since earning £1million in 2011.

Some rail bosses have shown a degree of restraint. David Brown, chief executive of Go-Ahead, whose railway arm Govia holds franchises including the beleaguered Southern franchise, received £801,000 in 2016/17.

Mr Brown has not taken a bonus for the two years to July 2017 due to Southern's poor performance and strike disruption. 

But he could still receive a bonus worth up to £829,000 this year – or 150 per cent of his £552,600 basic salary.

The earnings of some rail bosses have increased substantially over the past five years. In 2011/12, Sir Brian Souter, then chief executive of Stagecoach, received £876,000 – including a £581,000 salary and a £272,000 bonus.

Bruce Williamson, of passenger group Rail Future, said: 'Passengers might say these salaries paid to chief executives are unreasonably large.

There's a real problem when bonuses appear regardless of whether the company has performed well or not.' 

Labour MP Wes Streeting, of the Treasury committee, said: 'Commuters facing eye-watering fare hikes in the New Year will be less than impressed by the fat-cat salaries paid to rail bosses.

'It's time that railways were run in the interests of passengers not the people who run them.'

Research by the Trades Union Congress found commuters are spending up to five times as much of their salary on season tickets as passengers on the continent. 

A worker on average monthly earnings of £2,845, travelling from Chelmsford to London, spends around 13 per cent of their pay for the £381 cost of a season ticket – when similar-length commutes cost a mere 2 per cent of average wages in France and 3 per cent in Italy.

Despite this, an investigation by The Sunday Times found 48 per cent of trains arrive late or are cancelled in the five weeks before Christmas. The statistics cover nearly seven million arrivals.

Last night, a spokesman for the Rail Delivery Group, which represents train operators, said: 'The people mentioned here are running big and complex companies which operate across the globe, creating tens of thousands of British jobs and boosting the economy.'

Stagecoach said its chief executive's salary 'reflects his responsibilities'. 

A spokesman said: 'Our chief executive is responsible for a company which operates in the UK and North America and provides employment for more than 34,000 people, as well as helping support thousands more jobs in the supply chain. 

'His salary reflects his responsibilities across our transport operations and most of our profits are generated from our bus and coach services. 

'Last year, our rail companies paid more than £1.2billion to the taxpayer, amongst the highest of any transport group.' 

FirstGroup said its chief executive's basic pay had not increased for six years.

A spokesman said: 'FirstGroup’s remuneration policy considers what is appropriate for a company with five divisions across the UK and North America. 

'Our CEO’s basic pay has not increased for six years and there will be no further increases under the current policy. Our plans for our rail businesses will improve the experiences of our passengers through new trains, timetable improvements and other customer service enhancements.'

A Go-Ahead spokesman said of the company's chief executive said: 'This is the second consecutive year in which David has declined an annual bonus.'

Serco said Mr Soames heads a 'large international business' employing more than 50,000, that Merseyrail has 'among the lowest fares in the country' and that its Caledonian Sleeper service is being 'transformed with the introduction of new carriages in 2018'.

The Department for Transport said 97p of every £1 in fares is reinvested back into the railway.