Channel 4 doubles chief executive's salary, despite posting losses

Channel 4's chief executive, Andy Duncan, saw his pay double in 2007 to £1.2m, even though the channel is pleading for a £150m public subsidy.

Details of Mr Duncan's salary emerged as Channel 4 revealed that its main channel made a loss for the first time since 1992, as a result of poor ratings for Big Brother and the loss of phone-in revenue following the premium-rate phone-in scandal. Ratings for Channel 4's main channel fell by 11 per cent.

But Channel 4's digital channels increased their share of viewing and made a profit of £16.2m, leaving the Channel 4 family as a whole just in the black.

In 2006, Mr Duncan was paid £622,000, but in 2007 this rose to £1,211,000, largely due to a loyalty bonus of £450,000 for staying with the company for three years. Mr Duncan has now signed up to a new loyalty scheme which will pay out another £450,000 next year.

Luke Johnson, the Channel 4 chairman, justified the payouts, saying: "We operate in a competitive market place and we believe that we need the best talent available. Organisations like Sky and ITV pay significantly more and we think it's necessary if Channel 4 is to do as well as it can that we reward people."

The maximum bonus that can be paid to Channel 4 board members was reduced from 30 per cent of salary to 20 per cent last year, as a result of the outcry over premium-rate phone-ins.

In its 25th anniversary year, Channel 4 spent a record £624m on programmes. It also increased advertising revenue by 32 per cent to £148.4m. But Mr Johnson warned that Channel 4 was at a "tipping point" and urgently needed new funding if it was to continue to compete with the BBC as viewing and advertising income fall as a result of the digital switchover. "We have been defying gravity for the last few years where advertising is concerned," he said.

Channel 4 has pledged to cut the amount it spends on overseas acquisitions by £20m, but this will only take it back to a similar level to 2006. Last year it spent £148m on foreign programmes, including Desperate Housewives and Ugly Betty.