BBC suspends executive bonuses indefinitely

By Kate Holton

LONDON (Reuters) - Public broadcaster the BBC has suspended all executive director bonuses indefinitely, is reviewing their pay, and hopes to reduce the amount it spends on talent as it seeks to cut back in the economic downturn.

The world-renowned corporation, funded by a tax paid by all television-watching households, said it was making the changes as it, too, was feeling the impact of the downturn, through a drop in property values and in trading at its commercial arm.

To counter the downturn, it has also made progress in its cost savings program, delivering 237 million pounds of efficiencies in its first year in 2008/09.

The head of the BBC Trust, the body which oversees the corporation, said the BBC certainly looked bigger and more dominant during a recession as its rivals struggled.

"The Trust's view is that the BBC should never be bigger than it needs to be to fulfil its public purposes," Michael Lyons told reporters, as he delivered the BBC Annual report.

"Taking into account the current economic climate and the BBC's own financial challenges agreement has already been reached that executive board bonus payments will be suspended until further notice and not be introduced without the approval of the BBC Trust.

"There has been considerable disquiet in recent weeks about the salaries of top BBC staff," he said. "And I can clearly understand why hard-pressed licence fee payers may feel that the pay of some top executives and staff is generous."

The size of bonuses and expenses, from bankers to politicians and directors at the BBC, has become a hot topic in Britain as members of the public struggle during the downturn.