Ok, I have to admit that I have never really appreciated the popularity of Jonathan Ross. So his comments made at the British Comedy Awards last December on how his £6m annual deal (£18m over 3-years) was worth “1,000 BBC journalists” did not come as a surprise. Needless to say this remark did not earn him popularity when the BBC had earlier announced over 2,000 job cuts.

But the well publicised events of this past month raised wider strategic issues. Two high profile ones must management effectiveness based on the BBC’s handling of the situation and the accountability that arises from public funding through licence fees. And this brings up the question of where responsibility for setting market rates sit. Yes, celebrity pay deals may not be salary packages though the inflationary effect is not dissimilar.

So perhaps the BBC did have to ‘fight off’ rival offers from Channel 4 and ITV when the 3-year deal for Jonathan Ross increased in 2006 by a cool £4.5m to £16m. But did this play a part in Simon Cowell later agreeing to a mega million deal with ITV? The question of who leads (or should lead) the market rate for talent looks set to surface again.

Is it just a debate about the perceived worth of celebrities or does it also have a direct impact on salary packages in the public and private sector? And, if there is an impact, how does this affect issues such as accountability? Tell us what you think..

The BBC was itself in the news again last week as the Corporation’s 2007-8 annual report was published.  Of course what attracted most media attention was the executive pay awards in a year when the BBC announced 1,800 job cuts over a 5-year period to plug the funding gap. Director-General Mark Thompson chose not to take his bonus award while other executive directors, including the Director of BBC people, claimed their bonus awards.

The broadcasting Trades Union Bectu heavily criticised the decision at a time when jobs are being lost. The BBC remuneration report certainly makes interesting reading if you compare the double digit increases in total remuneration for some executives compared to last year. However, the report makes it clear that the Corporation should not lead the market on pay and, in it’s own words, should be ‘positioned around the median of the market’ for base pay. While the outcome may not be excessive relative to some private sector executive awards, it raises the question of how a publicly accountable body should reward it’s top team.

What about the pay increases? And should the BBC be awarding bonuses at such a time? Or are these changes just part and parcel of the change process? What do you think?

Have a look at the Just Rewards newsletter on executive reward.