The big bonuses enjoyed by Network Rail (NR) bosses were "simply unacceptable", a report by MPs has said.
The level of executives' bonuses should be something taken into account by rail regulators when assessing NR's performance, the report from the House of Commons Public Accounts Committee said.
MPs were unhappy with the fact that NR had fallen short of efficiency targets for the five years to 2008/09.
The report said: "The high level of performance pay and bonuses enjoyed by previous rail executives is simply unacceptable given their inability to meet the efficiency target."
Launching the report on Tuesday, the committee's chairman Margaret Hodge MP said: "The underperformance of NR makes it all the more unacceptable that its senior managers should enjoy excessive bonus and performance payments.
"We doubt whether the ORR can put effective pressure on NR to improve its performance. Our railways cost up to 40% more than our European equivalent operators. Everybody needs to focus on improving the efficiency of British railways."
She continued: "We are not convinced that NR's plans to defer about £1 billion of renewal work, such as to tracks and signalling, over five years will result in genuine efficiency savings. The Regulator (the ORR) must obtain evidence that putting off maintenance work on this scale is efficient, sustainable and safe."
The committee said the Office of Rail Regulation (ORR) should put in place a more robust system for monitoring NR's performance and the Department for Transport should review the ORR's powers.
Bob Crow, general secretary of the RMT union, said: "This report confirms everything we have been saying about the dangers of deferring and delaying safety-critical rail renewals.
"However, the report fails to address the main drag-weight on rail efficiency in this country and that is the greed and fragmentation of privatisation. It is the gold-plated, taxpayer-funded rip-off of privatisation that has left the UK's railways 40% less efficient and the only solution to that is public ownership."