One of the most common questions fired to MBW following our analysis of PRS For Music’s 2014 financials the other week regards the organisation’s most expensive operational cost: the people it employs.
According to the PRS financial report sent to members, the UK collection society spent £35.7m on ‘people’ in the 12 months – an 11.2% increase compared to 2013.
These ‘people’ costs amounted to 47% of PRS’s total expenditure in 2014 – which, remember, increased £8m despite the PRO paying out less to songwriters and publishers than it did the year before.
So it’s understandable that people are asking: ‘Where did this money go?’
Having trawled through PRS For Music Ltd.’s financials posted with Companies House, MBW now has something of an answer.
First, staff: PRS spent £29.75m on the wages and salaries of employees in 2014 – up just under £400,000 on the £29.35m spent in 2013.
Add in social security, pension schemes and other benefits, and 2014’s staff costs total reached £34.6m, an £800,000 rise on the same figure in the prior year.
The number of employees increased along with this wage burden – up from 600 to 615 people.
Do the maths and you find that the expenditure on the average annual wage (including social security, pensions and benefits) of a PRS For Music employee in 2014 was £56,282.
Remove social security – aka National Insurance – pensions and benefits, and the average annual wage at PRS in 2014 was £48,374.
How were these 615 staff divided up?
Another interesting area:
- Employees in PRS’s Licensing team grew by 12 people to 173.
- Support Services also swelled, up by 13 people year-on-year to 245.
- But the Distribution and Membership team was slashed by 20 people, down to 197 staff.
The other significant ‘people cost’ at PRS in 2014 was the Directors’ remuneration.
This amounted to £996,000 in the year in basic terms – up 12% from the £888,000 paid out in 2013. The money was divided between nine serving directors during the 12 months.
The vast majority of this remuneration (77%) was taken home by PRS For Music CEO Robert Ashcroft, who received £765,000 – a £15k annual increase compared to 2013.
As Executive Director, Ashcroft was also the only director to receive a pension contribution, which amounted to a further £19,000. He received the same pension contribution in 2013.
Additionally, Ashcroft was attributed a deferred annual bonus of £223,032 last year. The aggregate amount of this bonus now deferred for future payment is £433,236.
PRS For Music Chairman, Peter Bamford, took home £106,250 of the remaining Director’s pay – an 11.5% increase on his remuneration of £95,312 in 2013.
In addition, five external directors served PRS at various points during the year, but weren’t paid via PRS For Music Ltd.
One of these external directors, Estelle Morris, resigned earlier this month after five years of service.
It is worth bearing in mind that despite the trail of expenditure here, PRS For Music remains one of the most cost-efficient CMOs in the world.
According to MBW’s analysis its operational-cost-to-income ratio in 2014 stood at 11.47%.
[Update: However, as pointed out to MBW by a few moles, this cost-to-income ratio is less flattering when income from overseas – which has been processed and allocated abroad – is removed.]