Boris tells TfL bosses they must slash their bonuses and salaries

Transport for London Commissioner Peter Hendy will see no increase in his annual base salary of around £340,000 this year and has also been told that his annual bonus must be cut from a potential £170,000 to a maximum of £75,000.

This is substantially less than Mr Hendy has previously received. In 2006/7, the last year for which figures are available, he was paid a bonus of £115,000. The pay freeze will also cost him around £10,000 that he expected to receive as an inflation-related increase on his base salary.

TfL today insisted it accepted the cuts and would formally propose them to the board this month.

The bonus paid to Tim O'Toole, outgoing managing director of the Underground, has been cut from a potential £130,000 to a maximum of £70,000. The bonuses for all other senior TfL directors are capped at £50,000 - in most cases less than they previously received. The actual amounts of each manager's bonus will be decided by a TfL remuneration committee up to the City Hall-imposed cap.

City Hall sources said the cuts were necessary to reflect the growing strain on TfL's finances in the recession. The organisation is faced with falling passenger revenues along with growing demands for huge capital spending on projects such as Crossrail.

The Standard has learned TfL's overall bonus budget for the financial year 2008/9 was to have been £12.6 million - of which almost half, £5.7 million, was to have been allocated to a few dozen senior managers.

The rest was to have been shared among TfL's other staff, with around 13,000 operational employees, such as train drivers and ticket collectors, getting bonuses of £500 each and 6,000 junior managers and administrative staff sharing a bonus pot of about £300,000.

The bonuses for the junior ranks will remain but the value of the senior bonus scheme will be cut by around £1 million, with the biggest cuts coming at the top end of the pay scale. The cuts come amid growing controversy about TfL's large number of highly-paid senior staff.

Freedom of Information requests by the Standard revealed that in 2007/8,123 TfL managers earned more than £100,000 a year.

The average salary of TfL's six-figure managers is higher than the Mayor's. Fifteen TfL bosses, including the director of marketing, earn more than the Prime Minister. Only 16 of the 123 top earners, however, were directly involved in operating bus and train services.

TfL has pledged to cut costs by a total of about £250 million a year over the next nine years but Mr Hendy recently said the target was proving "challenging."

A TfL spokesman said: "Proposals to freeze senior pay and bonuses will be considered by the TfL board's remuneration committee."