The BBC is to tackle the “toxic” issue of executive pay with a crackdown on the numbers earning more than £150,000 and a stronger focus on the salary of Mark Thompson, its Director-General.
Lord Patten of Barnes, the chairman of the BBC Trust, disclosed that the corporation would be the first public sector organisation to implement the recommendations in a Government-commissioned review into fair pay.
One idea from the review, led by Will Hutton of the Work Foundation, could lead to Mr Thompson voluntarily placing up to 10 per cent of his salary “at risk” each year, and only taking it if a board agreed that it was deserved.
Another, which is likely to be accepted, is that the BBC will start publishing “pay multiples”, which reveal how many times more Mr Thompson’s salary is than that of the median employee. In 2009-10 the Director-General earned a £668,000 salary, but his total remuneration was £838,000.
“[Mr Hutton] has a lot of very good ideas,” Lord Patten told the Andrew Marr Show. Asked if he believed in cutting back on those paid more than the Prime Minister, Lord Patten suggested that the director of the British Museum might be a better example. Neil MacGregor earns £179,999 — more than David Cameron’s official income.
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The promise to tackle the issue comes just a week after Jeremy Hunt, the Culture secretary, warned that failure to act would place the BBC’s independence in jeopardy. “I think the best way for the BBC to avoid ministers wanting to tell them what to do with the money they get through the licence fee, is to sign up to total transparency and then the public can make up their own minds,” Mr Hunt said. He warned it would be a “huge mistake” to do anything else.
Lord Patten also said he wanted to address the number of people “deemed to be” senior managers and consider “fairness” across the board, He admitted that some high level workers were on better deals than others.
He added: “If we deal with this, we’ll deal with one of the most toxic reasons for the public’s lack of sympathy for the BBC as an institution even though they like enormously what it does.”
So far the BBC has frozen the pay of executive directors for four years and suspended bonuses. Mr Hutton’s idea on holding back basic pay would entail a committee, including a member of the workforce, assessing Mr Thompson’s performance against a “scorecard of measures”. It is not clear if this recommendation will be included.
A spokeswoman for the BBC Trust said a lot more work was needed on pay.
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Two at the top
Neil MacGregor, 65
Job Director, British Museum
Appointed 2002
Annual salary Between £175,000 and £179,999. He has a total pension pot of just over £2 million
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Mark Thompson, 53
Job Director-General, BBC
Appointed 2004
Annual salary £668,000 (£838,000, with pension)