Alex Mahon has been awarded the highest annual pay for a chief executive in Channel 4’s 40-year history, only months after the broadcaster avoided being privatised, amid a “challenging” economic environment and a TV advertising downturn.
The station’s top bosses were granted millions in income for the past year but said they had declined a pay rise for the coming year and were deferring special “retention” bonuses related to uncertainty over privatisation, in an attempt to stay “in line” with staff during the cost of living crisis.
The company said it had to “significantly” rein in spending in the second half of 2022, after a slump in television advertising, which remains its main source of income for commissioning shows.
Mahon, who joined the broadcaster in October 2017, was awarded just under £1.5m in total remuneration last year, according to its annual financial report from 2022, the year the broadcaster celebrated its 40th birthday.
This included a salary and benefits of £1.335m, before the inclusion of a special £155,000 bonus, now deferred, which the company said was “in relation to retention arrangements put in place to protect the organisation given the uncertainty of privatisation”.
Mahon’s salary last year of £1.49m is significantly higher than the £1.196m she was paid in 2021 – which included the maximum bonus payout possible by the corporation’s remuneration committee – or the £991,000 she made in 2020.
The pay deal means Mahon was granted almost 32 times the salary of a Channel 4 employee in the 25th percentile, which is the lower end of the broadcaster’s pay structure. The gap stood at 23 times in 2020.
Channel 4’s almost 1,000 staff also benefit from the company’s performance, which reported revenues of more than £1bn for the second year running, although the broadcaster’s annual report shows that the pay gap between top management and regular staff is widening quickly.
Mahon told a press briefing on Wednesday that she and other bosses had “deferred indefinitely” taking their retention bonuses but did not say they had declined them, and acknowledged the pressures faced by employees during a period of high inflation.
“We’ve tried to err on the side of making decisions for the lowest-paid staff in the organisation in terms of pay rises where the bulk of staff goes there, because I don’t think it’s easy to live in the UK this year if you’re at the lower-paid end,” Mahon said.
Mahon said she and other executives had “declined to take a pay rise” for 2023.
The company’s annual report stated that following year end, top executives declined a 50% payment, and opted instead for a deferred payment of 25%.
Mahon added: “We declined the 50% that was awarded because we felt we should be more in line with rest of staff, and when that payment was due to be made we were in trickier advertising waters … so deferred taking it and we haven’t set a date for whether we do or don’t take it.”
Other top executives at the broadcaster, including the chief operating officer, Jonathan Allan, and the chief content officer, Ian Katz, were also awarded the retention bonuses, worth more than £100,000 to each of them.
As a result, Allan’s total earnings for 2022, including the deferred retention bonus, reached £986,000, an increase of more than 35% compared with a year earlier, while Katz’s remuneration – again, including the deferred bonus – totalled £845,000, 36% more than in 2021.
The higher salaries meant that Channel 4 awarded more than £3.3m to its three top executives last year, £775,000 more than was paid a year earlier.
At the same time, the company agreed in January 2022 to give a 4% pay increase to staff, to reflect expected increases in the cost of living, while an additional 1% payment was made to lower-paid employees at manager level and below.
The company reported its revenues had risen above £1bn for the second consecutive year, although its £1.14bn revenue for 2022 was nearly 2% lowered than a year earlier.
Channel 4 said it had spent a “record amount” of £713m on content, while Katz added that reality show Married at First Sight Australia had been one of the biggest hits of the year on any platform.
The broadcaster confirmed it had had to “cancel a handful of shows” in response to the downturn in the ad market, which it predicts will slide by 6% this year.
However, Mahon insisted the company’s financial sustainability was not in question.
This follows earlier reports that SAS: Who Dares Wins was among the programmes which have not been recommissioned.
The broadcaster anticipates that 2024 will prove “more stable” for TV advertising, with the economy expected to improve. It predicts advertising demand will rise as audiences tune in to large sporting events including the Paris Olympic and Paralympic Games, the Euros football tournament, as well as a UK general election and US presidential election.
