BSkyB bosses clash over bonuses

BSKYB boss James Murdoch is in conflict with key staff who fear they might lose out on huge bonuses as the satellite broadcaster's plans change under his leadership.

Until now, two of the most critical factors in deciding the size of the bonuses have been how many people sign up to Sky and how much each subscriber spends with the group. At the moment, the company has 7.3 million subscribers, each paying an average of £382 a year.

But Murdoch, who was controversially appointed chief executive last year, wants to alter the criteria used to calculate bonuses.

Last month, the son of BSkyB chairman Rupert Murdoch announced that the company would launch a free satellite TV service available for a one-off fee of £150.

The measure was seen as a counter to the success of Freeview, the free digital TV service backed by the BBC.

While Murdoch has not abandoned targets inherited from his predecessor - including reaching eight million subscribers by 2005 with each paying on average £400 a year - other criteria will also be used as a measure of success.

'There is some confusion as to how the business model is going to change,' said a BSkyB shareholder.

'Until now, the model has been based on signing up premium-rate customers, but there is a growing sense that they are going to change that as more free customers come on board. There is some confusion as to whether this will hit executives.'

BSkyB refused to comment, but a source close to the company said: 'When the targets of the company change so will incentives.

'But there will inevitably be a gap between the board making its changes and that being translated into incentives.'