Annual Review 2007/2008

Reports on compliance and regulatory matters

Remuneration report

BBC World Service Management Board

This report explains the remuneration policy of the BBC for the BBC World Service Management Board. Details of Board members 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 Global News Division, and approved by the BBC Director-General and the Director, BBC People.

The Director, BBC World Service assesses the performance of the Board members before recommending their annual remuneration and bonus awards. Their remuneration is approved by the BBC Director-General and the Director, BBC People. The BBC World Service Director, Human Resources provides technical support to the Director, BBC World Service in this respect, but has no input into decisions affecting his own remuneration.

The BBC aims to ensure that the packages offered to BBC World Service 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 Board members and that of other employees.

The remuneration arrangements for BBC World Service Management Board members include the following components:

Base pay
Base pay is reviewed in August each year, taking into account external market levels and internal comparisons as well as the individual's responsibilities and performance.

Annual bonus
Recognising the importance of maintaining a balance between base pay and an annual bonus scheme reflecting individual performance and contribution, Board members are eligible to receive a bonus of up to 10% of base pay 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.

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

BBC World Service Management Board members are eligible to participate in the BBC Pension Scheme, which generally provides salary-related pension benefits on a defined benefit basis. For any employee joining on or before 1 November 2006 the accrual rate is 1/60th of final salary per year of service, subject to the HM Revenue & Customs earnings cap where appropriate. Normal retirement age is 60. For members of the Board who joined after this date, the accrual is 1.67% of their average base pay adjusted in line with price inflation, with a normal pensionable age of 65. Only base pay is pensionable and does not include any bonuses or other payments. The scheme provides for early retirement on medical grounds and life assurance cover of four times base pay up to a prescribed limit.

Senior employees

The number of senior employees (excluding BBC World Service Management Board members) earning over £50,000 per annum is set out below. Earnings include base pay, allowances and bonuses.

Annual Earnings to 31 March 08 Headcount
£50,000 to £59,999 126
£60,000 to £69,999 35
£70,000 to £79,999 17
£80,000 to £89,999 9
£90,000 to £99,999 3
£110,000 to £109,999 1
Total 191