Virgin Media’s top executives saw their bumper pay packets slashed last year after bonuses were cancelled.

A messy legal battle with BSkyB over Virgin Media’s bid for ITV and a fall in customer numbers in 2007 contributed to the broadband giant missing a £1.3 billion target for cash that Virgin generated.

However, although the top level lost out, the majority of other employees of the business did receive bonuses based on individual performance. According to Virgin Media — UK-based and Nasdaq-listed — this was to “retain and motivate employees”.

Virgin’s top six executives were awarded a total of just over $20 million (£10 million) in pay and share awards, compared with $50 million accrued by the seven top earners the previous year.

Steve Burch, who left abruptly as chief executive last August after disagreements at the top of the company, saw his total fall from $11.4 million in 2006 to $3.4 million. His base salary for the year was cut from $722,115 to $476,297. However, he received a further $1.5 million payment (twice his salary) on termination of his contract.

Part of the reason for such a striking difference is because of a drop in the amount of shares he was awarded, which fell from $9.2 million in 2006 to just over $900,000 last year, according to the company’s official financial statements.

The total of Jim Mooney, executive chairman, fell from $7.29 million to $5.19 million.

Neil Berkett, who was promoted from chief operating officer to chief executive last month, was awarded $4.3 million, down from $5.1 million in 2006. This included a base salary of $850,723 (against $783,233 in 2006) and included compensation, such as insurance and private medical cover, worth $219,454.

Virgin Media blamed the failure to reach its target operating cashflow on intense competition and falling product prices in the UK. The company has struggled in the past couple of years. Customer growth was hit after a spat with the rival BSkyB, in which News Corporation, the parent company of The Times, has a 39.1 per cent stake. Virgin Media cut Sky channels from its service resulting in an influx of customers demanding reductions on the price of their subscriptions.

The shares have also fared poorly, falling from $29.39 at their peak in July to $14.02 yesterday.

Virgin’s second-quarter results for 2007 showed that it had lost more than 70,000 customers. However, it has since been clawing them back, with 13,000 added in the third quarter and 24,400 in the fourth.

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