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Annual Review 2004/05
 
 
Reports on compliance and regulatory matters

5. Remuneration report

This report explains the remuneration policy of the BBC for the BBC World Service Management Board. Details of Management Board remuneration are included within Note 3c to the financial statements.

The remuneration package for the Director, BBC World Service, is set by the Director, BBC World Service and Global News, and approved by the BBC Director-General and the Director, BBC People. The remuneration of other members of the Management Board is recommended by the Director and approved by the BBC Director-General and the Director, BBC People.

The Director assesses the performance of the Management Board members before recommending their annual remuneration and bonus awards. BBC World Service's Human Resources Director provides technical support to the Director in this respect, but has no input into decisions affecting her own remuneration.

The BBC aims to ensure that the packages offered to Management Board members:

  • enable BBC World Service to attract, retain and motivate high-calibre executives
  • remunerate individuals fairly for individual responsibility and contribution, while providing an element of performance-related pay, reflecting the underlying performance of BBC World Service
  • take into account salary policy within the rest of the BBC and the relationship that should exist between the remuneration of Management Board members and that of other employees
The remuneration arrangements for Management Board members include the following components:

Basic salary

Basic salaries are reviewed in August each year, taking into account external market levels and internal comparisons as well as the individual's responsibilities and performance. The basic salary is paid as a fixed sum monthly in cash.

Annual bonus

Recognising the importance of maintaining a balance between basic salary and an annual bonus scheme reflecting individual performance and contribution, Management Board members are eligible to receive a bonus of up to 10% of basic salary for meeting certain performance targets. Qualitative and quantitative objectives are set at the beginning of the financial year, and performance is reviewed at the end of the year. Bonuses are reflected in the financial statements on an accruals basis for the performance period under review. Actual payments are made in August each year.

Benefits

In addition to salary and bonus, the main contractual benefits provided to Management Board members are a car allowance, private health insurance, pension and life insurance. Some members of the Management Board are also entitled to a car fuel allowance.

Pensions

Management Board members are eligible to participate in the BBC Pension Scheme, which provides salary-related pension benefits on a defined benefit basis, with an accrual rate of 1/60th of final salary per year of service, subject to the Inland Revenue earnings cap where appropriate. Only basic salary is pensionable. The scheme provides for early retirement on medical grounds and life insurance cover of four times salary.

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