During Millie Banerjee's oral evidence session
with the Committee, Charles Walker requested a note on the maximum
bonus that can be earned and how much of that bonus is paid out.
Q216 MR WALKER:
I think what would be very helpful is if you could provide
the Committee with a note showing for each year what the maximum
bonus that could be earned was and how much of that bonus was
paid, because then we can ascertain whether it really is a bonus
or just part of the salary.
OFCOM'S
BONUS POLICY
Ofcom offers a limited annual bonus payment,
awarded for good performance. Performance is measured against
objectives set in line with the annual plan and agreed at the
start of the financial year. Colleagues who are rated as unsatisfactory
are not eligible for consideration. Each individual's performance
is reviewed before determining the actual bonus amount. In the
case of the Chief Executive and current Executive Committee the
selected amount cannot exceed the contractual maximum of 20% of
base salary and these bonus proposals must be agreed by the Ofcom
Remuneration Committee.
OFCOM BONUSES
2008-09
In light of the current economic circumstances,
Ofcom froze pay for this financial year, and halved the amount
to be allocated for bonuses. Members of Ofcom's Executive Committee
were not considered for a bonus. Any bonuses awarded were weighted
to more junior pay grades.
CHIEF EXECUTIVE
AND EXECUTIVE
COMMITTEE BONUSES
Mr Walker expressed particular interest in the
Chief Executive's salary and bonus.
Ofcom was established in 2003 and during this first
year, the Chief Executive's maximum bonus potential was 12%. In
2004, this maximum bonus potential was increased to 20%. The bonuses
awarded to both Ofcom Chief Executives reflected the high quality
of leadership they have provided for the organisation. A bonus
is not a guaranteed part of his salary and the Chief Executive
has not always received the full amount.
The variable award of bonuses applies throughout
the organisation and is reflected in the bonuses awarded to members
of the Executive Committee (ExCo). ExCo is the senior executive
team responsible for overseeing the management of Ofcom. Its core
focus is on setting direction for the organisation, financial
and administrative decision-taking and monitoring. Its policy-making
responsibilities are limited to management policy only.
The colleagues listed in Table 1 have all sat
on ExCo. When Ed Richards became Chief Executive ExCo was restructured
and is currently made up of Ed Richards (CEO), Jill Ainscough
(COO), Peter Phillips (Partner), Stewart Purvis (Partner) and
Stuart McIntosh (Partner). In addition, Christopher Woolard was
appointed to ExCo as Partner in July 2009 and there is vacant
position for which Ofcom is recruiting.
BO
July 2009
