September 10, 2013

Michael Grade: BBC does not understand the value of money

The former chair of the BBC Board of Governors, Sir Michael Grade, has admitted that he may have paid Mark Thompson too much when he hired him as director general in 2004.

Speaking to BBC’s Newsnight following Thompson’s appearance in front of the Commons Public Accounts Committee yesterday, Grade said: “On reflection maybe we paid him too much or maybe we didn’t bargain hard enough with him over his salary.”

Thompson was paid £560,000 when he joined the BBC from Channel 4. His total remuneration had risen to more than £800,000 by the time he left the corporation in 2012.

Earlier in the day, he had appeared before MPs to answer questions relating to excessive pay-offs to departing senior executives at the BBC. Grade said that the BBC failed to appreciate the “value of money”.

He told Newsnight: “I think the BBC suffers more and more from a lack of understanding of the value of money.

“If you don’t have to earn the money and you have that quantity of money, it’s hard to keep a grip on the value of that money.”

Addressing the question of how salaries have inflated since he hired Thompson months after the resignation of former director general Greg Dyke in the wake of the Hutton inquiry, Grade said: “Since that point, salaries have escalated to the point where the old dictum where you worked for the BBC at a discount has gone.”

In the evidence session yesterday, the PAC was particularly concerned with a £1m pay-off to former deputy director general Mark Byford in 2011 when his post was made redundant.

Grade suggested that Byford’s departure had a negative impact on the BBC, which has suffered from a wave of scandals in the two years since he left.

“If Mark Byford had still been deputy director we would not have had the McAlpine horror and we would not have had the Savile horror,” he said. “He was a great asset to the BBC and the BBC has suffered by his departure. What price you put on that is a matter that’s history now.”