BBC to cut executive pay by 25%

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BBC to cut executive pay by 25%


Thursday, October 29 2009,




The BBC Trust has backed plans to cull over 100 senior BBC managers and also trim top executive pay by 25% over the next three and a half years.

Under proposals put forward by the BBC Executive, the current pool of 634 senior managers will be reduced by 18% by July 31, 2013. The corporation will also trim 25% from the total executive pay bill, which presently stands at around £79m.

The pay of all nine executive directors, including director general Mark Thompson, will be frozen for a further three years, with an indefinite suspension of bonuses. All senior management salaries will also be held at current levels until August 2011.

In addition, the BBC's new remuneration strategy will deliver a "clear and explicit discount against the private sector when setting senior manager pay". The corporation further intends to reduce the number of external hires by fostering talent from within the organisation.

BBC Trust chairman Sir Michael Lyons praised Thompson and his team for producing "a comprehensive set of proposals" which will bring value to the licence fee payer while ensuring that the BBC can still attract top talent.

"Of course I realise this will have implications both for current and future BBC employees," he said. "However, it is right that as a major public service organisation, the BBC shows leadership on this issue during difficult economic times."

Thompson said that the review demonstrates the BBC's commitment to achieving "significant discount" in management pay compared to its peer group organisations in the industry.

"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," he added.

"A few months ago we announced our determination to reduce the amount we pay top on-air talent. The recommendations we have announced today seek to achieve similar reductions within our senior management community. Senior managers will see their total remuneration fall over the period, with the biggest reductions felt by those in the most senior positions."

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BBC Trust agrees 25 per cent cut in BBC senior management pay bill

The BBC Trust has agreed to proposals put forward by the BBC Executive to cut the amount the BBC spends on paying its senior managers by 25 per cent over the next three and a half years. The Trust has also endorsed a new pay strategy for senior managers joining the BBC and agreed to the proposal to freeze the pay of Executive Board directors for a further three years.

In February this year the Trust set the Executive a challenge to review the BBC’s approach to remuneration, recognising the wider economic climate, the expectations of licence fee payers, and the BBC’s own efficiency targets. The Executive responded by setting up a far-reaching remuneration review, which reported today. The main proposals are:

To cut the BBC senior management pay bill by 25 per cent over the next three and a half years (i.e. by 31 July 2013)
To seek to reduce total numbers of senior managers by 18 per cent within three and a half years
To freeze the pay of Executive Directors and members of the BBC Direction Group for a further three years (making four years of freeze in all). This will apply also to the Director-General
To confirm the indefinite suspension of bonuses for all Executive Directors and members of the BBC Direction Group
To suspend bonuses for other directors and senior managers for a further two years
To freeze senior management salaries for a further year beyond the freeze for the current year (i.e. to at least August 2011).