Union leaders have criticised the "extraordinary decision" to give the new chief executive of Network Rail an £84,000 pay rise.
The not-for-dividend company, which has no shareholders, said former Shell executive Mark Carne, 54, will succeed Sir David Higgins on April 1 next year, earning a basic annual salary of £675,000. This compares with Sir David's figure of £591,000 - representing an increase of 14% for the new man.
Network Rail (NR) has faced constant criticism recently over train punctuality, with repeated warnings by rail regulators about its performance, particularly on long-distance routes.
The decision was met with condemnation by unions. Manuel Cortes, leader of the TSSA transport union, said the level of Mr Carne's salary was "an insult to rail passengers who have seen price rises of 20% since May 2010".
Mr Cortes added that Mr Carne stood to earn large bonuses over the next three years.
Mick Whelan, general secretary of train drivers' union Aslef, said: "The extraordinary decision to hire a new man, Mark Carne, to do the same job as Sir David, but to pay him a whopping £80,000 more, exposes the extraordinary lack of governance and lack of proper public scrutiny in the not-for-dividend Network Rail."
Bob Crow, leader of the RMT transport union, said: "Clearly this sizeable pay increase sets a benchmark for the rest of the rail industry and in the interests of fairness RMT will be factoring it in to our pay negotiations on behalf of the many thousands of NR staff."
Matthew Sinclair, chief executive of the TaxPayers' Alliance, said: "Mark Carne is going to receive an enormous salary and can expect to take home even more after his bonus and other remuneration.
"Taxpayers get poor value from the lumbering monopoly at Network Rail and it is now quite clear that high pay does not buy high performance. "
The Prime Minister's spokesman said the pay deal was a matter for Network Rail - but pointedly referred to the restraint imposed by the Government across the public sector.
The spokesman said: "It is an independent company so remuneration is a matter for that company. If you would like to know the message that the Prime Minister would give when it comes to salaries, for example across the civil service and around the Cabinet table, you have had the civil service pay freeze and restraint, you've had public sector pensions reform, you've had ministerial salaries cut by 5% and frozen across this Parliament.
"So I think that sends a very clear, unambiguous message on the Prime Minister's views around civil service and ministerial pay."
NR said Mr Carne's base salary of £675,000 was determined following "an exhaustive and independent process", comparing the salaries of chief executives in both the public and private sectors given Network Rail's unique position as a not-for-dividend, independent company.
A spokesman said: "The review concluded that the proposed salary reflected that unique status placing, as it does, the chief executive's salary at a point between the two sectors."
NR said Mr Carne would not take any potential annual incentive payment for 2013/14.
Mr Carne was formerly executive vice president for the Middle East and North Africa for Royal Dutch Shell. He also worked for natural gas company BG Group. He will join NR on January 6 before taking over from Sir David on April 1.
NR chairman Richard Parry Jones said: "Through his work with Shell and BG Group in very testing and difficult environments, Mark Carne has shown that he has the necessary skill and global experience to build on, and develop further, what Network Rail has already achieved in meeting these challenges under the leadership of David Higgins. We thank David for all he has done for the company."
Mr Carne said: "The success of Network Rail is vital for Britain's economy and this is an exciting time for the whole rail industry. I am delighted to be given the opportunity to lead Network Rail and look forward to working with the team to drive performance to new heights."