Channel 4 bosses get bigger bonuses despite £27m loss
Tuesday 14 May 2013
Channel 4 paid increased bonuses to its bosses last year despite the state-owned broadcaster going £27 million into the red, its annual report reveals today.
Chief executive David Abraham got a £100,000 bonus on top of his £515,000 salary as his total package jumped to £744,000 against £701,000 a year earlier.
Chief creative officer Jay Hunt collected two bonuses totalling £116,000 on top of her £390,000 salary, taking her total package to £542,000 compared to £487,000 during 2011.
She got a £76,000 bonus for her work as programming boss, overseeing shows such as Made In Chelsea, Fresh Meat and Homeland. Hunt was given a further £40,000 “to recognise her outstanding contribution during 2012”, including the Paralympics.
Channel 4 said it had planned in advance to make a loss by operating a “temporary deficit” as it invested in programming and digital innovation such as its online service 4oD. Abraham said the corporation, which makes money chiefly from advertising, had amassed a record £290 million in reserves by the end of 2011 and there was no need to hoard so much cash.
“As a not-for-profit public service broadcaster, we believe it is right that cash reserves should be invested back into content and digital innovation rather than building up beyond levels necessary to keep the corporation self-reliant,” he said. Channel 4 is planning to make another loss this year, before breaking even in 2014.
Abraham stressed that Channel 4 was able to afford to dip into its reserves after “strong surpluses” in 2010 and 2011 when the corporation made £74 million in profits after tax.
Chairman Lord Burns defended the bonuses and insisted he was “mindful of the restraint necessary for a publicly owned body at a time of considerable economic uncertainty”. Burns, who also chairs the UK arm of Spanish bank Santander, said it was important that the broadcaster could “reward commercial success”. Abraham’s team “exceeded” financial targets, as it had budgeted for an even bigger annual loss. But they did not get maximum bonuses because of viewing figures.
The main channel’s audience share fell to 6.6 per cent of all viewing and the portfolio of channels, which includes E4 and More4, dipped slightly to 11.5 per cent. Abraham said “Channel 4 had a more stable year than ITV1, BBC2 and Sky1”.
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