Current, Former BBC Execs Grilled on Excessive Severance

8:42 AM PST 09/09/2013 by Georg Szalai
Mark Thompson, former BBC director general, current CEO of the New York Times Company.

UPDATED: BBC Trust chair Chris Patten and Mark Thompson, now CEO of The New York Times Co., appear in front of a parliamentary committee.

LONDON – Members of a committee of the British parliament on Monday grilled current and former BBC top executives about excessive severance payments to former managers at the public broadcaster.

Repeatedly, the parliamentarians expressed surprise that members of the BBC Trust, the operating body of the broadcaster, which sets broad strategic goals, but is independent of BBC management, didn't request full details of high severance payments. Current and former trust members said several times that the trust has no decision power on severance under its current setup.

Former BBC director general Mark Thompson, who is now CEO of The New York Times Co., was questioned about one particularly big payment of $2.2 million (£1.4 million) to his former deputy Mark Byford, saying it was part of a successful cost-cutting program. "We and I achieved a lot in terms of reducing senior management payments," he said.

"We did not lose the plot," he also said when pressed on the issue of payments that went beyond contractual promises, adding that the payouts would lead to lowers costs for the BBC and the public over the long term.

Thompson said that in some cases more pay came in lieu of notice, but he rejected that he or other BBC executives paid longtime acquaintances more, saying that negotiating severance caps across the board would have taken much more time. "I don't believe it's favoritism," he said.

He said he was under "ferocious pressure" from the BBC Trust to reduce spending on management. And he said the savings were greater than the extra cost of added payments. He said that one month's delay would have added £1 million in costs to the BBC. "It is simple mathematics," he concluded.

Thompson reiterated that he and his team informed the trust of severance arrangements.

BBC trustee Anthony Fry argued Monday though that Thompson pushed back on the trust and its influence. It "got pushed back time and time again on issues, such as bonuses," he said.

And BBC Trust chairman Chris Patten on Monday denied Thompson's suggestion that he misled parliament in the past, saying he did not know about the excessive severance payouts. He said that when he came on board as chairman, he was not given a full briefing.

Asked if the BBC Trust, instead of ensuring good value for money decisions at the BBC, but had provided poor value for money, former BBC Trust chair Michael Lyons echoed Thompson argument that the price of delaying decisions that came with some extra cost would have reduced the savings for the broadcaster.

Committee head Margaret Hodge started the meeting, saying its goal was not to "bash the BBC," but to "shine a little light" on the way the company works.

During the hearing though, she said that "a small elite of senior managers" seemingly got "the most generous" severance payouts, while ordinary staff did not.

And she chided BBC human resources boss Lucy Adams, who had recently corrected some evidence she gave at a previous hearing. "I'm not having any more lies this afternoon," she told Adams.

BBC director general Tony Hall in an e-mail memo to staff before the hearing said: "I know today is going to be a tough one for the BBC, but I'd just like to remind you that none of this reflects on you, or the quality of your work -- for which many, many thanks. Thank you all for working so hard, being on top of your game and making some really great programs."

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai

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