Trust agrees 25 per cent cut in ±«Óătv senior management pay bill
The Trust has also endorsed a new pay strategy for senior managers joining the ±«Óătv 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 ±«Óătv's approach to remuneration, recognising the wider economic climate, the expectations of licence fee payers, and the ±«Óătv'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 ±«Óătv 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 ±«Óătv 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 ±«Óătv 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).
Alongside these measures, the new remuneration policy sets out:
- A clear and explicit discount against the private sector when setting senior manager pay
- A review of all senior manager posts when they become vacant
- A strategy for growing talent within the ±«Óătv to the senior management ranks, reducing the percentage of external hires
- A recognition that within the ±«Óătv there are a number of different markets for staff and the approach to pay will be differentiated to reflect that.
Implementation of these proposals will fall to the Director-General, but the Trust will keep the position under review in its regular meetings with him to ensure that the ±«Óătv continues to be able to deliver the high quality services that Licence Fee payers rightly expect.
±«Óătv Trust Chairman, Sir Michael Lyons, said:
"The Trust challenged the ±«Óătv Executive to review senior pay at the ±«Óătv. Mark Thompson and his team have responded with a comprehensive set of proposals that strike the right balance between ensuring the ±«Óătv can attract the best people to do the job, while ensuring maximum value for the licence fee payer.
"Of course I realise this will have implications both for current and future ±«Óătv employees. However, it is right that as a major public service organisation, the ±«Óătv shows leadership on this issue during difficult economic times."
Mark Thompson, Director-General of the ±«Óătv said:
"The review published today demonstrates that the ±«Óătv is already achieving a significant discount against peer group organisations in its remuneration of senior managers. 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.
"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."
Ends.
Notes for editors:
There are currently nine Executive Board directors; they are most senior ±«Óătv executives and include the Director-General. There are 634 senior manager posts in the Corporation's public service operations. The current total pay bill for Executive Board directors and senior managers is around ÂŁ79m.
The ±«Óătv's Direction Group incorporates the Executive Board and other senior Divisional Directors. It oversees governance of pan-±«Óătv issues in line with responsibilities delegated to it from the Executive Board and provides senior level leadership on pan-±«Óătv objectives.
The Trust is today publishing on its website some key documents giving the background to today's decision. These are:
- The Executive's remuneration review prefaced by the formal Trust response
- Correspondence between the Trust and the Executive on the question of executive pay.
In October 2007, as part of the 'Delivering Creative Future' plan, the Trust set the Executive a cumulative, cash-releasing efficiency target of 3% a year over the five-year period to 2012/13. In the year 2008/9, the Exec made savings of ÂŁ192m, net of costs.
The date for implementing the reduction in the pay bill for Executive Directors and senior managers is 31 July 2013.
All of these proposals relate to the ±«Óătv's public service operations and not its commercial subsidiaries.
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