Michael Grade is being paid just shy of £2m for his first year in charge at ITV, a figure many times the £140,000 he would have got had he stayed at the BBC.
Mr Grade defected in January last year to help re-energise a channel struggling with falling advertising revenues and ratings. And despite taking a hit for the premium rate phone-in scandal – which cost the company £58m and is still being investigated by the communications watchdog – the executive chairman took home £1,934,000, including a bonus of £1,121,000. John Cresswell, the chief operating officer, was paid £1,231,000, including a bonus of £656,000.
"The level of bonus is based on the achievement of a combination of corporate financial, specific business and individual targets, which are all closely related to shareholder value creation," according to ITV's annual report, published yesterday.
But the company's share price has dropped from more than 100p at the start of last year to below 70p now. And annual results for 2007 published last week show contractions in every area. Revenue was £2.1bn, compared with £2.2bn in 2006; pre-tax profits were £118m, compared with £288m; and operating profit dropped from £264m to £192m. But despite earnings per share going down from 5.5p to 3.5p, the dividend will stay level at 3.15p.
Remuneration for 2008 will include an internet target, reflecting broadcasters' struggles against the fragmentation of traditional TV audiences, competition from online content, and the digital switchover in 2012.
"For awards made in respect of 2008 performance, the corporate financial and strategic element will require the achievement of demanding targets based on profit, revenues and share of commercial impacts as well as the use of online platforms," said the company.
Notwithstanding the discrepancy between the falling share price and Mr Grade's bonus, the executive chairman's pay packet is not entirely out of kilter with industry norms, according to Mark Beilby, the director of capital markets media research at Dresdner Kleinwort. "These kinds of levels are not hugely out of line with a £4bn FTSE 100 stock, and ITV did have to inveigle him over from the BBC Trust chairman's position," he said.
And despite ITV's drama Rock Rivals being thoroughly beaten in the ratings by the BBC's The Apprentice, the channel's "share of commercial impacts" figures – the number of prime time viewers – have been going up over the past six months.Reuse content