TWO controversial outgoing Lothian Buses chiefs have pocketed £180,000 in bonuses in the last two years – and are set to rake in another £90,000 before they leave.
Engineering director Bill Devlin and finance director Norman Strachan threatened to take Lothian Buses to an employment tribunal last year after being told they would no longer receive bonuses following a boardroom row.
It is understood Lothian Buses decided not to fight the case after lawyers warned it would be too expensive, with no guarantee the company would win.
Now council finance records show they have each been handed around £45,000 in bonuses in each of the last two years, with roughly the same figure expected to be dished out when they leave their jobs at the end of January.
That means that despite attempts to curb their payouts, they will each have racked up around £135,000 in bonuses since 2014 by the time they step down in January.
Both men made more than £200,000 in total in 2015/16 – dwarfing the salaries of the Prime Minister and First Minister.
A council source said: “We have a situation where the senior members of a management team were willing to take their own company to an employment tribunal. That’s £270,000 that could have gone into investing in the bus service, or could have gone back to the council.”
Councillor Nick Cook, Tory transport spokesman, said: “£270,000 is a significant amount of money – particularly when we are talking about public money.
“No doubt the public will take a very dim view of this upon finding that such funds have been paid out.”
Mr Devlin and Mr Strachan were part of the so-called “Annandale Three”, a trio of top Lothian Buses directors who became embroiled in a bitter dispute with then-managing director Ian Craig in 2014.
The protracted row eventually led to the resignation of bus chairwoman Anne Faulds and Mr Craig, with Mr Devlin and Mr Strachan agreeing to step down in January 2017.
At the time, a leaked council letter branded the leadership of Lothian Buses “dysfunctional”.
Two new Lothian Buses directors, Sarah Boyd and Nigel Serafini, have been told they will not be able to claim bonuses when they take their positions over the next couple of months to replace the outgoing pair.
Meanwhile, an ongoing slashing of salaries and bonuses at the top levels of Lothian Buses is set to save the city almost half a million pounds, figures show.
Council leader Andrew Burns said new salaries would be “benchmarked” against the rest of the industry, insisting: “It’s an end to the bonus culture.”
Ms Boyd, currently head of operations, will take over as operations director after January next year.
Meanwhile Mr Serafini, currently head of commercial, will become commercial director from next week.
Cllr Burns said the new team, working under managing director Richard Hall, would “help build a positive and constructive relationship going forward”.
Council accounts show that neither former managing director Mr Craig nor operations director Bill Campbell – the third member of the so-called “Annandale Three” – received bonus payouts in the last financial year.
Lothian Buses chairman Jim McFarlane said: “Lothian Buses is a highly successful business that supports thousands of jobs, contributes millions of pounds to the city’s purse and is one of the highest rated for passenger satisfaction in the country. We have also been named Scotland’s public transport operator of the year for two out of the last three years.
“As we have clearly stated previously this year, the directors have been paid in accordance with their pre-existing contracts, based on this performance, with the amounts openly published in Edinburgh council’s annual accounts as has been the case for several years.”
A bitter row that damaged bus firm
IT was a bruising row that damaged the reputation of one of the most successful, publicly-owned bus companies in the UK.
The dispute which led to a host of Lothian Buses’ top dogs stepping down kicked off in August 2014, when a formal complaint about then-chief executive Ian Craig was lodged by operations director Bill Devlin, engineering director Bill Campbell and finance director Norman Strachan.
The trio – dubbed the “Annandale Three” after the location of the main bus depot – claimed Mr Craig undermined them and failed to consult on major decisions.
An investigation upheld five grievances, including an allegation Mr Craig spent £269,000 on the brand launch for umbrella body Transport for Edinburgh without their knowledge and that staff “disappeared from employment with no discussion with the board”.
After a failed mediation process, former chairwoman Ann Faulds recommended Mr Craig’s dismissal, but resigned when the council refused to back her.
The protracted clash eventually led to Mr Craig stepping down, with the three other directors also agreeing to leave the company.
Bosses have signalled the new appointments to the bus firm mark an end to the saga, with salaries slashed and the culture of big bonuses consigned to the past.