BBC suspends executive bonuses indefinitely
By Kate Holton
LONDON, July 14 (Reuters) - British public broadcaster the
BBC has suspended all executive director bonuses indefinitely,
is reviewing their pay, and hopes to reduce the amount it spends
on talent as it seeks to cut back in the economic downturn.
The world-renowned corporation, funded by a tax paid by all
television-watching households, said it was making the changes
as it, too, was feeling the impact of the downturn, through a
drop in property values and in trading at its commercial arm.
To counter the downturn, it has also made progress in its
cost savings programme, delivering 237 million pounds ($385.6
million) of efficiencies in its first year in 2008/09.
The head of the BBC Trust, the body which oversees the
corporation, said the BBC certainly looked bigger and more
dominant during a recession as its rivals struggled.
"The Trust's view is that the BBC should never be bigger
than it needs to be to fulfill its public purposes," Michael
Lyons told reporters, as he delivered the BBC Annual report.
"Taking into account the current economic climate and the
BBC's own financial challenges … agreement has already been
reached that executive board bonus payments will be suspended
until further notice and not be introduced without the approval
of the BBC Trust.
"There has been considerable disquiet in recent weeks about
the salaries of top BBC staff," he said. "And I can clearly
understand why hard-pressed licence fee payers may feel that the
pay of some top executives and staff is generous."
The size of bonuses and expenses, from bankers to
politicians and directors at the BBC, has become a hot topic in
Britain as members of the public struggle during the downturn.
The vast sums paid out to the corporation's most
high-profile presenters has also drawn criticism from the
country's press.
The BBC, known for its popular news and drama, agreed in
2007 to an annual rise in funding of no more than 3 percent over
the next six years, giving it 3.6 billion pounds, less than it
had originally asked for.
In comparison, however, the corporation's commercial rivals,
such as ITV (), have been hammered by the advertising
downturn, making the BBC's position all the more enviable.
A recent report by Communications Minister Stephen Carter to
address the country's digital future said it would look to the
BBC to help support the rest of the industry.
BBC Worldwide, the commercial arm of the corporation, which
exports programmes and magazines around the world, could partner
with Channel 4, which is publicly owned but funded by
advertising.
The BBC said on Tuesday that Worldwide's revenues had
exceeded 1 billion pounds for the first time, but that profits
before interest and tax and after exceptional charges were down
to 86 million pounds from 118 million the previous year.
A slice of the licence fee which was ring-fenced to help
elderly people move from analogue to digital TV could also be
used in the roll out of basic broadband coverage, and given to
companies willing to provide regional news for commercial
broadcasters, it added.
Lyons said on Tuesday he was opposed to the top slicing of
the licence fee, as it could lead to a lack of independence and,
eventually, an increase in the fee, but he said the group was
open to partnerships.
($1=.6147 Pound)
(Reporting by Kate Holton; editing by Simon Jessop)
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