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Last Updated: Monday, 10 July 2006, 10:07 GMT 11:07 UK
BBC chairman backs pay increases
BBC chairman Michael Grade
BBC chairman Michael Grade will get a 57,000 pay rise in 2007
BBC chairman Michael Grade has defended the recent pay increases awarded to the corporation's top executives.

Speaking on Radio 4's Today programme, he said the increases represented "a lot of money" but were "not as much as they could all be earning elsewhere".

"Pretty well everybody in the BBC works for less than they could in the private sector. There is no reason why their loyalty should be punished," he said.

Concerns over BBC pay were "an annual ritual", he continued.

Broadcasting unions meet on Monday to consider their response to BBC moves to close its final pension scheme to new members.

It is likely they will agree to ballot their members on strike action.

'Market median'

Mr Grade said he was "very sorry" that people objected to the salary increases, but said it was BBC policy "to pay the market median".

He said the Board of Governors had to act "in the long-term interests of the corporation".

The National Union of Journalists (NUJ) has responded angrily to the rises, which - according to the BBC's annual report - puts its executive base pay at 4.5% above the market average.

"BBC executives have awarded themselves inflation-busting salary increases at a time when staff are being offered a below-inflation pay rise," it said.

But the BBC said those figures did not take into account caps on bonuses that bring total pay and benefits below the market median.

Mr Grade's own salary will rise by more than 57,000 when he becomes a trustee in January under terms set by the Department for Culture, Media and Sport.

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