The BBC’s £79m pay bill for senior management is set to fall by a quarter and more than 100 positions will go by 2013 under plans approved by the broadcaster’s regulatory body.
Executive directors face an “indefinite” suspension of bonuses under the scheme, put forward after the BBC Trust ordered the executive in February to create a “clear and explicit discount” to BBC managers’ remuneration compared with commercial broadcasters. The trust approved the plan on Thursday.
16% receive more than £150,000
Sixteen per cent of the BBC’s senior management are paid more than £150,000 a year, the broadcaster’s executive remuneration report revealed on Thursday, as it strives to balance private sector competition with a “BBC brand discount”.
All grades of BBC senior management are paid on average more than their public sector peers. But the “public service ethos” and “brand value” of the BBC means the broadcaster can get away with paying its managers at least 25 per cent less than the private-sector average.
The BBC’s executive board is paid 44 per cent more than its equivalent in the public sector, at an average of £359,000 a year, but its remuneration comes at a 63 per cent discount to the average of its commercial rivals.
Mark Thompson, BBC director-general, had among BBC managers the greatest pay premium to the public sector average, at 155 per cent, but receives 58 per cent less than leaders of commercial media groups.
The BBC said the number of senior managers has remained “fairly static” over the past five years, with the total of 634 just below the five-year average of 635.
The BBC’s guaranteed income from the licence fee has been contrasted with the difficulties faced by rival commercial broadcasters. Television advertising revenues are forecast to drop by about 12 per cent this year.
Last November the BBC’s executive board members agreed to forgo their bonuses this year, acknowledging the economic pressures facing the media sector. An 18-month pay freeze was introduced for hundreds of the BBC’s most senior employees in January.
Sir Michael Lyons, the BBC Trust’s chairman, said: “It is right that as a major public service organisation, the BBC shows leadership on this issue during difficult economic times.”
Under the BBC’s latest pay proposals, an extended pay freeze for executive board directors and the elimination of 18 per cent of the BBC’s 643 senior management positions over the next three and a half years will help shave £20m from the BBC’s personnel costs. Senior managers’ bonus suspension will also continue for a further two years.
Mark Thompson, director-general of the BBC, said the most senior managers would see the biggest cutbacks.
“The review published today demonstrates that the BBC is already achieving a significant discount against peer group organisations in its remuneration of senior managers,” Mr Thompson said.
“Nonetheless, I and every other senior manager need to recognise that we are in a different economic climate, that the media sector labour markets are depressed and that there are significant pressures on public finances.”
The reduction in managers’ real-terms pay follows criticism of the pay of BBC’s star presenters, particularly after Jonathan Ross and Russell Brand left lewd messages on the answerphone of the Fawlty Towers actor, Andrew Sachs.
The broadcaster also faced questions on expenses claimed by some executives earlier this year.
Labour and the Conservatives have also criticised the BBC’s management. David Cameron, leader of the opposition, accused the broadcaster of being “over-managed [and] too bureaucratic”.
Sir Michael Lyons said: “Mark Thompson and his team have responded [to the BBC Trust] with a comprehensive set of proposals that strike the right balance between ensuring the BBC can attract the best people to do the job, while ensuring maximum value for the licence fee payer.”
