The BBC mulled giving former deputy director general Mark Byford a £2.5m pay-off, a document released by the BBC Trust has revealed.
The previously confidential document, headed Project Silver, was put together by then BBC director general Mark Thompson in 2010 as he weighed the options for the most cost-effective way to dispense with Byford – who was also head of news.
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The £488,000 deputy director general role was cut as a result of a plan put forward in October 2009 to reduce senior managers at the BBC by 20 per cent. Byford was also head of news and was in line for such a huge pay-off because of his 32 years service with the BBC.
In the end his departure from the BBC was announced in October 2010, although he did not leave until the following June. He was given a £949,000 reundancy payment and is believed to have one of the biggest pension funds in the public sector, at around £3.7m.
The Project Silver briefing reveals that Thomson considered three options for Byford's exit. "Custom and practice" would have seen him paid 12 months' notice plus one month's pay for each year of service plus an injection to his pension pot, at a total cost £2.5m.
Minimum contractual terms of one year's notice, plus a further year for his long service, would have seen him paid more than £1m – Thomson estimated.
A further compromise option was set down to be discussed with Byford which would have seen him continue working with the BBC until his 55th birthday on reduced pay and terms. This would have cost the BBC £700,000, Thompson said, and would have given Byford enhanced pension benefits. This was Thompson's preferred option.
Thompson said: "Neither Lucy [Adams head of HR] nor I believe it would be possible to conclude an imicable settlement on minimum terms". He said he believed an amicable settlement could be reached at £1.3m or £1.4m.
Thompson said: "So the dilemma we are wrestling with is between trying to deal fairly with someone who has devoted many years of service to the BBC (and who is being realistic about pension augmentation in particular) as against numbers which even at the contractual minimum might cause us serious difficulty when they become public."