A fresh row over executive pay flared yesterday when a leading union claimed plans were being drawn up for a new bonus scheme for executives at Network Rail.

The Transport Salaried Staffs Association said senior bosses at the rail infrastructure firm would be in line to share £1.7 million in 2014.

NR said no executives would receive a bonus this year and no decision had been taken about any future payments.

Any long-term arrangements, covering 2012-15, will be voted on by members.

NR, which holds its annual meeting later this month, said a letter had been sent to members from the chairman of the remuneration committee, which pointed out that the company faced a "worsening executive retention and recruitment issue".

The letter said the remuneration committee was proposing to increase the base salary of executive directors in line with the outcome of an internal management pay review.

Suggested performance-related retention payments will be put to the AGM for approval.

The details are being discussed at a members' workshop in London today.

Manuel Cortes, general secretary of the Transport Salaried Staffs Association, said: "These people must be living on Planet Zog if they do not understand the public's outrage over unjustified bonuses. NR is in all but name a public company receiving £4 billion a year in direct subsidy.

"Passengers want to see that money go into producing a better and cheaper railway, not into the wallets of directors who are already handsomely rewarded."

Shadow Transport Secretary Maria Eagle said: "Passengers facing annual fare rises of up to 11% will be staggered that our rail industry could be so out of touch and doesn't recognise how times have changed.

"This is yet another example of why the debate over the future of the rail industry is so necessary.

"Passengers expect Network Rail to be focusing on improving train punctuality not obsessing with their already sizeable pay packets."