The chief executive of Network Rail has received a record bonus of more than half a million pounds only weeks after the company was fined £14 million for causing chaos on the railways at Christmas with overrunning engineering works.

The news will anger passenger groups and trade unions, which questioned why a company with no competitors or shareholders should pay such large bonuses.

Iain Coucher has been paid an annual bonus of £306,000 and an additional bonus of £205,000 under the long-term incentive plan of the company. With his salary of £585,000 his total pay this year will exceed £1 million despite missing targets for punctuality and financial efficiency.

Peter Henderson, the infrastructure director, was paid a £219,000 annual bonus and Ron Henderson, the finance director, received £209,000. They also received additional long-term bonuses of £153,000 each.

The total amount paid in bonuses to the three executive directors exceeds £1.2 million, double the £648,000 paid last year and the highest amount ever awarded by the company. Network Rail’s 33,000 maintenance workers and signallers will each receive £871. John Armitt, a former Network Rail chief executive who is now chairman of the Olympic Delivery Authority, will receive £178,000 for being in office during part of the last three years.

Network Rail appeared to ignore the advice of the rail regulator, which wrote to the remuneration committee of the company last month advising it to take into account various failures when setting the bonuses.

Network Rail timed the publication of the bonuses to come a few hours after it announced its annual results, showing a paper profit of £1.2 billion.

Mr Coucher told The Times that his annual bonus, and that of the 30 most senior managers, had been cut by 14 per cent, because of the engineering overruns in Rugby, London Liverpool Street and Glasgow at Christmas. He rejected a suggestion that he should have followed the example set by Willie Walsh, the chief executive of British Airways, who declined his bonus last month because of the problems surrounding the opening of Terminal 5 at Heathrow.

He said: “Mr Walsh took his judgment personally. We run a very different operation to BA. It opened one big project. We do that sort of thing every weekend. Every year we do 5,000 projects and we completed 4,950 successfully.

“I would simply ask people to look at our record. We have a railway that is safer than ever before. We have saved taxpayers and farepayers billions of pounds over the last few years by running the railway better.”

Gerry Doherty, the General-Secretary of the transport union TSSA, said of Mr Coucher: “Passengers will simply not understand why he is being rewarded for failure on this scale after all they have suffered.”

In a letter to Jim Cornell, the chairman of Network Rail’s remuneration committee, the chief executive of the Office of Rail Regulation said Network Rail had fallen “well behind target” on delays due to infrastructure work on two of the busiest lines in Britain: the East Coast and Great Western. Bill Emery said the company had “unwound almost half the gains achieved in earlier years” for reducing the cost of track replacements and that there were systematic errors in the way that it assessed its efficiency.

The regulator also had to take enforcement action after the fatal crash in Grayrigg last year to make Network Rail improve track patrolling.

Theresa Villiers, the Shadow Transport Secretary, said that the bonuses were unacceptable after such a huge failure at the New Year.

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