BBC did not lose plot over £1m pay-off, says Mark Thompson

 

Mark Thompson: "Mark Byford's pay-off was value for money"

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Ex-BBC director general Mark Thompson has told MPs the corporation had not "lost the plot" when it agreed a pay-off of almost £1m to his former deputy.

He accused Lord Patten, chairman of the trust which oversees the BBC, of making "unfair and untrue" claims not to have known about Mark Byford's payment.

Lord Patten said he "couldn't have been expected to know" about the sum.

Mr Thompson told MPs the trust had put him under "ferocious pressure" to make senior redundancies like Mr Byford's.

The BBC has been criticised for paying £25m ($39m) to 150 outgoing executives - £2m ($3.1m) more than their contracts stipulated.

'Full support'

Mr Thompson - who is now chief executive of the New York Times newspaper - was one of seven senior BBC figures giving evidence to the Public Accounts Committee (PAC).

He was asked about a £949,000 pay-off package given to former deputy director general Mr Byford.

Analysis

A "grossly unedifying occasion" which has damaged the reputation of the BBC - that was Margaret Hodge's verdict. But have we learnt anything?

MPs seemed to accept Lord Patten's argument that he really could not be expected to have questioned deals such as Mark Byford's £1m pay-off given it was done before he arrived and was said to be within contract. Mark Thompson appeared to convince the committee when he said he had tried to keep the trust informed.

The question about why the trust had not done more hung in the air. The answer that it was not their job did not go down well with some of the MPs. The former chairman Sir Michael Lyons accepted that perhaps they should have taken more of an interest.

The government has been watching with interest; the question of how the BBC is governed is being discussed. The debate over the renewal of the charter for the BBC is about to begin and today will only add weight to a growing debate about the future of the trust.

He said Mr Byford's redundancy had represented "value for money" as part of a wider effort to cut the number of highly-paid executives and save about £19m a year.

He said he had believed he had the "full support" of the BBC Trust in trying to do that within a very short time frame.

Committee chairman Margaret Hodge said under Mr Byford's contract he could have been paid off with £500,000.

But Mr Thompson said he was paid almost twice that because the corporation wanted him to be "fully focused" on his job in the final months of his tenure and not "worried about his future and taking calls from head hunters".

He said the fact that he had known Mr Byford for more than three decades and socialised with him did not affect judgement about his severance package.

Asked by Mrs Hodge if the BBC had "lost the plot", Mr Thompson replied: "I do not think we lost the plot."

'Eye-watering'

BBC HR director Lucy Adams told the committee the corporation was trying to "get people out of the door" with minimal disruption and no risk of legal action - and to do that, it was "occasionally" necessary to pay more than was contractually required.

BBC Trust

  • meant to act as the "guardian" of licence payers' money and ensure the BBC fulfils its remit to inform, educate and entertain
  • sets the BBC's strategy, approves how and where money is spent, sets editorial guidelines and reviews the performance of all BBC services
  • its chairman, Lord Patten, and 12 trustees are separate from the BBC's executive board, which is led by the director general and controls the day-to-day running of the corporation - in line with a framework set by the trust
  • also responsible for protecting the BBC's independence

Former trust chairman Sir Michael Lyons agreed with the MPs that payments like Mr Byford's "look eye-watering", adding that "clearly the trust is damaged" by the whole affair.

But he said the process of making "rapid reductions in senior management" was "very difficult", adding: "You think we should have done it for less....

"The price of that would have been that it would have taken longer and the savings would have been smaller."

BBC trustee Anthony Fry told the PAC there had been "months and months of arguments" between the trust and the BBC executive committee over financial issues such as pay, perks and bonuses - although he admitted that severance packages were not given much attention.

"It became a battleground. I got the distinct view... that our views were not being taken with what I believed was the seriousness they deserved," he said.

'Damaging'

In July, Lord Patten told the PAC he was "shocked and dismayed" by the scale of pay-offs and said that should Mr Thompson be called before MPs he would be as interested as they were to hear why the trust had not known about them.

Ahead of his appearance before the committee, Mr Thompson sent a letter to the PAC saying he had emails which showed trust members had approved the payments.

Then, in person, he told the MPs that Lord Patten's claims not to have known about them were "damaging, unfair and misleading statements".

Lord Patten tells the committee that he "cannot accept" that he misled them over payments

In reply, Lord Patten said he took the charge of misleading the committee "very strongly" and insisted he had been told settlements for Mr Byford and former marketing boss Sharon Baylay were "contractual payments" agreed before his appointment.

"I'm in the position in which I'm accused of having misled the committee on something I didn't know and couldn't have been expected to know," he added.

Trust director Nicholas Kroll said the deputy director general's severance package was not part of the trust's remit.

But Mrs Hodge said the the job of the trust was "to protect the licence fee payers' interests", adding: "There is not one person around the table who can understand why there was no challenge from you."

Former chairman of the BBC executive board remuneration committee Marcus Agius said there had been "a great deal of concern" within his committee "about these redundancies and the amounts".

"We challenged and tested Mark Thompson and after sustained debate we were finally persuaded on value for money grounds," he said.

'Grossly unedifying'

Ms Adams apologised to the committee for stating in the July hearing that she did not know of an email explaining the pay-offs when in fact, she had helped to compose it.

The BBC has recently introduced a £150,000 cap on severance pay.

Ms Adams said she suggested a cap to the executive board before Mr Byford's package was agreed, but it had decided it would be "inappropriate to introduce the cap at that time".

The BBC's head of HR said she made a mistake in her earlier evidence to MPs

Summing up the hearing, Mrs Hodge said it had been a "grossly unedifying occasion which can only damage the standing and the reputation of the BBC".

She said the committee believed the governance of the corporation was "broke".

Lord Patten told her he accepted there was "a cultural issue" around pay at the BBC "that we really do have to recognise and apologise for and deal with very robustly" - but that "trying to get people to face up to lowering salaries and reducing the number of managers is an uphill struggle".

He rejected suggestions that responsibility for governance should be taken from the trust and handed to Ofcom, and said he hoped over the next couple of years the corporation could demonstrate that the existing system could work.

The biggest severance payments included:

  • Mark Byford, deputy director general, 31 years of service - £949,000
  • Jana Bennett, executive director, 33 years - £687,333
  • Departmental director, 25 years - £866,300
  • Caroline Thomson, chief operating officer, 17 years - £680,400
  • Controller, 31 years - £476,700
  • George Entwistle, director general, 23 years - £470,300
  • Departmental director, 2 years - £394,500
  • Controller, 26 years - £381,600
  • Roly Keating, departmental director, 29 years - £376,000 (money returned minus tax)
  • Project director, 19 years - £356,200
  • Head of department, 33 years - £347,900

The PAC meeting in July followed the publication of a report in which the National Audit Office criticised the corporation, saying the scale of the payments put public trust at risk.

A spokesman for the prime minister said earlier that "legitimate questions" had been raised about the use of licence payers' money and should be answered.

 

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  • rate this
    +3

    Comment number 352.

    caught in the headlights ,bubbling dribble yes its was all there, would you trust this lot?, personally I wouldn't entrust that shower with ball of string in a maze

  • rate this
    +3

    Comment number 351.

    Protecting Savile, Hall and all the other sexual predators, political and commercial bias, fiddling game shows and now name your severance pay. This is what our license money is WASTED on. The bbc has become a disobedient dog and should either be brought to heel or put down.

  • rate this
    +27

    Comment number 350.

    Strange how you can get arrested for stealing a mars bar but not for giving 25 million pound away.

  • rate this
    0

    Comment number 349.

    I'm sure the Magistrates Courts are rubbing their hands awaiting all your cancelled license fee cases coming up. Good luck with the, 'there's always repeats on', or ' they are wasting my money' arguments. I'll bet they haven't heard those before....

  • rate this
    +5

    Comment number 348.

    If this was a pay to view Company who would care ? Don't like it, well just stop paying and drop out. Sadly this is the BBC and you can't drop out. Have a good look at all the faces fudging the answers, in a few months / years time they will be off with thousands in their back pockets and we will still have to pay to watch ITV

  • rate this
    +2

    Comment number 347.

    The national licence fee is a fair sum of money, perhaps it's spending requires more transparency?

  • rate this
    +4

    Comment number 346.

    My vision of the BBC of the near future is to identify and nurture those parts that are genuine public service broadcasting and sell the ratings chasing element (Eastenders, Top Gear etc.). Then the BBC will be focussed and the Trust will have no excuses for poor governance.

  • rate this
    +1

    Comment number 345.

    if someone is leaving to go to a new job why do they get a payoff

    i cant understand it

    but if payments are contractually required then i guess they should be made

    but only the amount that has to be paid

    the amounts overpaid should be clawed back if possible

    and asked to be returned if not and the recoveries published

    they get very well paid when working so these huge payments are not right

  • rate this
    +3

    Comment number 344.

    Good to see our what our TV licence fees pay for
    just like politicians, always lining their pockets with as much as they can!
    good to see them get caught once in a while

    i request a panorama special on this please ;-)

  • rate this
    +5

    Comment number 343.

    A reason given for one of the large pay-offs was that the person would stay focused on his job, I guess the reason he was being let go was because he was useless in the position, and so it made no difference. These people(with 30-40 years service) were responsible for letting Savile and his gang run riot through the organisation, the price for that has still to be paid by the license payer.

  • rate this
    +5

    Comment number 342.

    Six and near seven figure salaries for public servants are obscene. The PM earns 25% what Thompson did! Money, degrees per se don't justify loadsa cash. High performance under pressure work by surgeons/ entertainers does justify above the norm pay but public service should be just that, accountable salaries we can all relate to.

  • rate this
    +5

    Comment number 341.

    I think the best way to sort this out is for people to be able to opt out of the bbc and stop paying for average output.

  • rate this
    -1

    Comment number 340.

    I watched the BBC News Broadcast this afternoon.

    Undeniably the best BBC Live Coverage of an event I've seen in years, unspoilt by inane commentary, loud background music or studio pundits whose opinions are about as valuable as those expressed by the people I meet at bus stops.

    Well worth the Licence fee.

  • rate this
    +12

    Comment number 339.

    @302

    "a police investigation seems inevitable". No chance I'm afraid. The police are too lazy (I deal with them professionally) and political and let's be honest are on the take as well with their "retire at 48" pensions, pay offs etc. We have a cosy elite in this country who are fleecing the rest of us.

  • rate this
    +4

    Comment number 338.

    Eh Isn't it grand to know your licence fee is so well appreciated by so few!
    Really this shows instituitionalised greed, arrogance and self interest. To put it simple, "The rats are in charge of the cheese!" Would not expect less from this bunch of New Labour types.

  • rate this
    +14

    Comment number 337.

    "The BBC is not responsible for the content of external Internet sites"

    Ha ha ha... of course not, the BBC is not responsible for anything internally it seems either.

  • rate this
    +2

    Comment number 336.

    314.Nemesis65
    I decry cronyism wherever it is.
    You only need to ask yourself this so see if it is immoral:
    Is force required to make people contribute to X? If yes, it is immoral.
    X includes failed bankers.
    X includes a failed Communist TV broadcaster.

  • rate this
    +5

    Comment number 335.

    I live in a world where everyone is significantly worse off than they were a few years ago. Lord Gideon tells us that the economy is doing better, so I wonder who has walked off with all the money.

    Perhaps it's this lot?

  • rate this
    +2

    Comment number 334.

    #241.Goves Silly Temper Tantrum...So it is apparent from an obvious 'leftie spender like man with no arms as long as it is other people's money'; individual like you that it is OK for public sector bosses to pay theirselves these huge amounts of your and my cash?
    Typical leftie values!'

  • rate this
    +2

    Comment number 333.

    These people should have got what they were entitled to in their contracts. The next question has to be "Why do many of the top executives get such large severance packages in the first place?"
    Far too often the boys at the top who are already on outrageous remuneration, leave or get sacked, only to walk into another position with similar pay.
    The pay-off is just icing on the cake.

 

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