An oversight committee of the British Parliament sharply criticized top BBC executives and trustees, including the corporation’s former director general, Mark Thompson, now the president and chief executive of The New York Times Company, judging that their award of severance payments to departing managers appeared to be part of a culture of cronyism.
The report, posted on the committee’s website early Monday, said that “cronyism” at a “dysfunctional” BBC led to executives getting larger payoffs than they deserved. The Public Accounts Committee called it a “serious breakdown” that “cast doubt” on the BBC’s governance, a complicated structure that includes a board of overseers.
“There was a failure at the most senior levels of the BBC to challenge the actual payments and prevailing culture, in which cronyism was a factor that allowed for the liberal use of other people’s money,” the committee found.
That governing body, the BBC Trust, said in a statement that it accepted that it had “let down license fee payers” — nearly every Briton with a television pays a fee that goes to the BBC — but said that it had since put a cap of £150,000, or $245,000, on severance payments.
In hearings in September, at which Mr. Thompson and Chris Patten, who heads the Trust, both testified, the committee members were clearly shocked and puzzled by severance payments of some $39 million paid to 150 departing executives.
The National Audit Office said that of the 150 senior executives who left in the three years ending December 2012, the BBC paid more salary in lieu of notice than contractually mandated in 22 cases, for an extra cost of $2.2 million.
Mr. Thompson, who ran the BBC from 2004 to 2012 before he became chief executive of The Times, defended the severance payments in September in front of the same committee, saying they had ultimately helped the BBC cut costs.
Reached by phone for comment on Sunday night, Eileen Murphy, the spokeswoman for The Times, sent a statement from Mr. Thompson by email.
“Severance payments for senior managers working for public organizations are inevitably unpopular and controversial,” Mr. Thompson wrote. “The sole reason for making these payments was so that the BBC could rapidly reduce the number of senior managers and make far larger savings on behalf of the public. The redundancy program has released tens of millions of pounds to be plowed back into BBC services.”
He added, “Despite some inflammatory language in the PAC report, there is absolutely no evidence of any wrongdoing by anyone at the BBC in relation to these severance payments.”
The legislators were particularly upset with the 2010 deal given to Mr. Thompson’s former deputy, Mark Byford, in which he was paid roughly $1.5 million — two years’ salary, half of it paid in lieu of notice that he would be let go — and then retained and paid for eight more months.
Mr. Thompson said in September that the deal for Mr. Byford was done to move ahead with staff reductions under public pressure, while keeping Mr. Byford on hand to continue handling important tasks. He insisted that the BBC Trust was fully informed and that his position had the support of the executive remuneration committee. Some members of the Trust have said that they were not made to understand how large the payoffs would be.
Mr. Thompson argued that rapid reduction in senior management — as many as one-quarter of positions — initially saved the BBC $55 million and reduced its future salary and expenses by as much as $30 million a year.
Mr. Patten came under considerable criticism for the large severance given to Mr. Thompson’s successor, George Entwistle, who lasted only 54 days in the job. He resigned in November over a reporting scandal, but was given a full year’s salary in addition to a normal severance payment totaling $766,000.
Margaret Hodge, the chairwoman of the committee, said the payments had put the BBC’s reputation at risk and that the committee remained concerned about the veracity of some of the oral evidence it had heard. “Some of the justifications for this put forward by the BBC were extraordinary,” she said in a statement.
“We are asked to believe that the former Director General Mark Thompson had to pay his former deputy and longtime colleague Mark Byford a substantial extra sum to keep him ‘fully focused’ on his job instead of ‘taking calls from headhunters.’ ”
Ashley Southall contributed reporting.
The report, posted on the committee’s website early Monday, said that “cronyism” at a “dysfunctional” BBC led to executives getting larger payoffs than they deserved. The Public Accounts Committee called it a “serious breakdown” that “cast doubt” on the BBC’s governance, a complicated structure that includes a board of overseers.
“There was a failure at the most senior levels of the BBC to challenge the actual payments and prevailing culture, in which cronyism was a factor that allowed for the liberal use of other people’s money,” the committee found.
That governing body, the BBC Trust, said in a statement that it accepted that it had “let down license fee payers” — nearly every Briton with a television pays a fee that goes to the BBC — but said that it had since put a cap of £150,000, or $245,000, on severance payments.
In hearings in September, at which Mr. Thompson and Chris Patten, who heads the Trust, both testified, the committee members were clearly shocked and puzzled by severance payments of some $39 million paid to 150 departing executives.
The National Audit Office said that of the 150 senior executives who left in the three years ending December 2012, the BBC paid more salary in lieu of notice than contractually mandated in 22 cases, for an extra cost of $2.2 million.
Mr. Thompson, who ran the BBC from 2004 to 2012 before he became chief executive of The Times, defended the severance payments in September in front of the same committee, saying they had ultimately helped the BBC cut costs.
Reached by phone for comment on Sunday night, Eileen Murphy, the spokeswoman for The Times, sent a statement from Mr. Thompson by email.
“Severance payments for senior managers working for public organizations are inevitably unpopular and controversial,” Mr. Thompson wrote. “The sole reason for making these payments was so that the BBC could rapidly reduce the number of senior managers and make far larger savings on behalf of the public. The redundancy program has released tens of millions of pounds to be plowed back into BBC services.”
He added, “Despite some inflammatory language in the PAC report, there is absolutely no evidence of any wrongdoing by anyone at the BBC in relation to these severance payments.”
The legislators were particularly upset with the 2010 deal given to Mr. Thompson’s former deputy, Mark Byford, in which he was paid roughly $1.5 million — two years’ salary, half of it paid in lieu of notice that he would be let go — and then retained and paid for eight more months.
Mr. Thompson said in September that the deal for Mr. Byford was done to move ahead with staff reductions under public pressure, while keeping Mr. Byford on hand to continue handling important tasks. He insisted that the BBC Trust was fully informed and that his position had the support of the executive remuneration committee. Some members of the Trust have said that they were not made to understand how large the payoffs would be.
Mr. Thompson argued that rapid reduction in senior management — as many as one-quarter of positions — initially saved the BBC $55 million and reduced its future salary and expenses by as much as $30 million a year.
Mr. Patten came under considerable criticism for the large severance given to Mr. Thompson’s successor, George Entwistle, who lasted only 54 days in the job. He resigned in November over a reporting scandal, but was given a full year’s salary in addition to a normal severance payment totaling $766,000.
Margaret Hodge, the chairwoman of the committee, said the payments had put the BBC’s reputation at risk and that the committee remained concerned about the veracity of some of the oral evidence it had heard. “Some of the justifications for this put forward by the BBC were extraordinary,” she said in a statement.
“We are asked to believe that the former Director General Mark Thompson had to pay his former deputy and longtime colleague Mark Byford a substantial extra sum to keep him ‘fully focused’ on his job instead of ‘taking calls from headhunters.’ ”
Ashley Southall contributed reporting.