The new chairman of the BBC Trust, Lord Patten, wants to cut two-thirds of the BBC's team of 550 senior managers and to end the custom of giving them annual bonuses and free private health insurance.
In his debut speech, Lord Patten, a former chairman of the Conservative Party, said "the public service BBC needs to distance itself from the market". He warned that the salary levels paid to senior BBC executives had become a "toxic" issue for the corporation. "Licence-fee payers don't expect the BBC to pay sky-high commercial rewards to people that work for a public service," he told the Royal Television Society in London.
He is to introduce a pay multiple, in effect a cap on salaries, that will mean the pay of its top executives cannot be more than nine times greater than the median wage of staff at the BBC.
Lord Patten said: "Although of course the BBC must continue to strive to attract and retain outstanding candidates for senior posts, the Trust's intention is that over time this multiple will fall. "This action is important, because the BBC must do right by the licence-fee payers who pick up the bill and by all the staff that work throughout the organisation."
But he also defended the BBC's journalism against accusations of bias and singled out for praise the BBC's Middle East editor Jeremy Bowen who had been criticised by the BBC Trust under his predecessor. Lord Patten said the commercial arm of the corporation, BBC Worldwide, should not be privatised. He warned against the BBC diminishing its presence online. "We should do what we can to avoid the shrinking of the internet as an open, democratic territory."