Monday, 4 July 2011

BBC Fat Cat salaries

For a reasonably sized firm, one with a turnover from the tens of millions up to £100m or so, I would be surprised if the CE were paid more than about twelve times the clerical / admin salary. If this were £14k, it gives a ceiling of £168k for the CE's wedge. In between it gives all the room you need for an efficient, flat hierarchy based on a maximum span-of-control of eight and all with decent salary differentials. Of course, if profits are good and sustained, boards will tend to reward the top team over and above this.

As firms get bigger, with turnovers in the hundreds or even thousands of millions, so the hierarchy expands - you need more layers of management to maintain your span-of-control. You'll probably split the thing into business divisions, but then you'll need a separate Finance Division and HR Division to keep the centre in control and hold everything together. But even in the largest firm, I can't see the need to pay the CE more than twenty times the clerical / admin salary - a ceiling of £280k using the figure above. But then other factors come into play; there's the prestige of the firm, enhanced by having an unreasonably highly paid CE. Then there's the risk of poaching and all the other factors that HR Consultants will roll out to justify vast additions to the CE's wedge. But for a boring, steady company making normal profits, 20x the base salary is a sufficient gap to allow all the hierarchy you need. 

And indeed when the profligacy of BBC top salaries was first in the press, and Mark Thompson's £850k package, I'm quite certain that a cap of "twenty times the lowest paid" was talked of. The Telegraph this morning even repeats it;
Lord (Chris) Patten, Britain's last governor of Hong Kong and a former Conservative Party chairman, hailed research by Will Hutton of the Work Foundation into a Government proposal to limit top public servants' pay to no more than 20 times that of their lowest paid staff.
This must have terrified the gilded dags in the executive suites who must have been pushing the little calculator buttons on their Blackberries like a school of monkeys with new typewriters. And lo and behold, for the same Marr show interview, the Guardian is putting out a completely different story, and one in which the lowest pay has magically (in an Orwellian sort of way) become median pay;
Patten said he was particularly interested in the "very good ideas" in Hutton's report on public sector pay, which rejected a suggestion that top pay in public sector bodies should be capped at 20 times median pay in the organisation.
The median salary is the figure below which half the BBC's employees are paid and above which half the BBC's employees are paid. My guess is that the figure's about £35k or so - giving a ceiling of £700k or so. Oh, how convenient! The base salary (excluding all the extras) of all the following are suddenly therefore fine and no change will be needed;

£647,000 Mark Thompson, Director General

£459,000 Mark Byford, Deputy Director General

£406,000 Jana Bennett, Director BBC Vision

£380,000 Jon Smith, Chief Executive BBC Worldwide

£370,000-£400,000 Peter Salamon, Director BBC North

£329,000 Zarin Patel, Chief Financial Officer

£328,000 Caroline Thompson, Chief Operating Officer

£314,000 Timothy Davie, Director Audio & Music

£310,000-£340,000 Alex Yentob, Creative Director BBC Finance; Erik Hughes, Director Future Media and Technology; Helen Boaden, Director BBC News; Sharon Baylay, Director Marketing, Communications and Audiences

£280,000-£310,000 Balraj Samara, Director Vision Operations; Pat Longhrey, Director Nation and Regions; Richard Sambrook, Director Global News

£250,000-£280,000 Dominic Coles, Chief Operating Officer Journalism; Jay Hunt, Controller BBC One; Roland Keating, Director of Archive Content (TV)

£220,000-£250,000 Daniel Cohen, Controller, BBC Three; Ed Williams, Director of Communications, Marketing; Janice Hadlow, Controller BBC Two; John Linwood, Chief Technology Officer, Future Media & Technology; John Yorke, Controller television drama production; Julie Gardner; Head of Independent Drama Commissioning; Nicholas Kroll, Director BBC Trust; Richard Deverell, Controller children’s television; Roger Mosey, Director sport

£190,000-£220,000 Andrew Parfitt, Controller RI/IXtra/Asian Network, Audio & Music; Andy Griffee, Editorial Director Project 1, Operations; Anne Morrison, Controller Network Production; Chris Day, Group Financial Controller; Chris Kane, Head of Corporate Real Estate; Dorothy Prior, Controller Production Resource; Emma Swan, Head of In-House Commissioning, BBC Vision; Graham Ellis, Controller Production, Audio and Music; John Vickerman, HR Shared Services Director; Liam Keelan, Controller daytime television; Marka Damazer, Controller Radio 4 and Radio 7; Mike Goodie, Director Employee Relations; Nicholas Eldred, Group General Counsel and Secretary; Peter Horrocks, Director World Service; Peter White, Chief Executive, BBC Digital UK; Richard Klein, Controller BBC Four; Robert Shennan, Controller Radio 2 and 6 Music; Roger Wright; Controller R3; Stephen Mitchell, Head of multimedia news programmes; Tom Archer, Controller factual production, BBC Vision

(Source HERE 2009 figures)


Anonymous said...

Pattern is placed by Blue Labour to sell out conservatism. It's what 'New Tories' do.

cuffleyburgers said...

The point you don't mention Raedwald is that in a privately run organisation the CE is expected to add a certain amount of value - by directing strategy, by mergers/acquisitions, divestments and he is usually in part motivated to this by having significant interests in company stock, and it has been demonstraed repeatedly that top flight senior management can add billions to shareholder value. Furthermore shareholders can (increasingly) vote to dismiss a board or to block their remuneration.

This is not the case in the BBC where there is no requirement to add shareholder value, there is no possibility of shareholders (the general public) getting any say whatsover in the management of the organisation, and indeed customers are forced at gunpoint to buy the product, via the TV licence.

The whole concept of the BBC is so spectacularly morally bankrupt - there can be no comparison with a private sector company.

Anonymous said...

@ cuffleyburgers.

Spot on! Equally, I am certain that Raedwald had no intention of supporting the BBC largesse - quite the opposite in fact.

Coney Island

English Pensioner said...

The problem is not only high salaries, but the number of people receiving such salaries.
Most companies seem to have some sort of pyramid structure, sometimes steep sided, sometimes very shallow, but the BBC seems to have developed some unique geometric structure of its own, a steep pyramid for about half the structure, with a very wide shallow pyramid on top.
Never having been to business school, I nevertheless would have thought there should be some formula for deciding the number of people that an organisation should have in its top 10% salary group, and to me the number seems excessive

john miller said...

Alex Yentob is the Creative Director BBC Finance?

It's all his fault then...

Budgie said...

The BBC should be sold off as a pay-to-view media corporation. If we actually had a real Tory leader rather than a sniveling LimpDim admiring, EU-loving, promise-breaking, semi-statist, BBC loving, pudge faced excuse, then it could happen. But we don't.

Anonymous said...


Well said.

Bill Quango MP said...

Pleased you did the maths.
When I heard the BBC statement and the median salary bit I was immediately suspicious that it was a stitch up.

Glad you confirmed it.