Channel 4 CEO Alex Mahon made £1.2m in 2021. Photo: Geoff Pugh for The Telegraph
Channel 4 chief executive agrees to waive over £100,000 bonus amid backlash from producers over budget cuts.
Alex Mahon to delay payout with chief content officer Ian Katz and COO Jonathan Allan. The company is struggling with rapid inflation and a recession in the advertising market.
Last year, Channel 4 announced bonuses dubbed “withholding payments” in an attempt to keep nearly 1,000 employees struggling to fight privatization.
This was later extended to executive directors, meaning they could receive an additional payment of 25 percent of their salary. Ms Mahon earned £1.2m in 2021.
A spokesperson for Channel 4 said the decision weeks ago to drop bonuses was “as part of a broader response to a very difficult ad market.”
It is understood that the network's bosses also turned down a pay increase earlier this year.
But the move also reflects Channel 4's efforts to appease independent producers who feel yourself the impact of the recession in the advertising market.
The broadcaster, which successfully fended off the sale in January, has slowed commissioning in recent months and pushed back some projects to 2024.
It also canceled several shows that were in the early stages of development. or has not yet officially entered service.
John McVeigh, chief executive of Pact, which represents independent manufacturers, said executive bonuses were “shockingly bad opticians” given the wider environment.
He added: “I am very pleased that the executives have waived bonuses and salary increases, given that the entire sector is going through very difficult times … I think that is the right thing.”
Channel 4 and other commercial broadcasters, like ITV are feeling the impact of the downturn in the advertising market as brands tighten their belts.
Companies have built up a large stock of programming since the pandemic, meaning they are now relying on the existing pipeline rather than spending money on creating new ones show.
However, industry figures have raised concerns about a lack of transparency in how broadcasters communicate their spending plans to producers.
Mr McVeigh added: “It would be better to go out to the community and explain exactly what is happening and when the situation will improve or not so that everyone can plan.”
A Channel 4 insider said the company's 2023 production budget will match last year's record £700m, adding that the decision to ditch bonuses highlights his commitment financial strength.
The broadcaster is due to publish its 2022 annual report in the coming weeks.
A spokesperson for Channel 4 said: “Channel 4 cares deeply about the indie community and our wider chain freelance supplies. They are the beating heart of our business.
“While we understand that the actions we are asking for some cause some short-term pain, the plan we have in place highlights our ongoing commitment to our financial sustainability and our ongoing supporting the UK's independent manufacturing sector.”
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