Compensation Advisory Partners reported that 71% of the largest 100 US companies disclosed shareholder-approved director compensation limits in their 2021 proxy statements, a majority of which apply to both cash and equity-based compensation. As has been the case historically, equity limits are most commonly expressed in terms of dollar values rather than shares.
Also noteworthy:
- Largely attributable to COVID, median director pay was flat year-over-year but is expected to rise again as pressures relating to COVID impacts and optics wane.
- Virtually all companies compensate directors for board leadership roles. Median additional compensation for non-executive chairs was $223K (or 1.73x standard director compensation) and for lead directors was $50K (or 1.15x standard director compensation).
- More than 95% of companies compensate for committee chair roles, with median additional compensation as follows: Audit Committee Chair: $28K; Compensation Committee Chair: $20K; and Nom/Gov Committee Chair: $20K.
- Committee member fees are less common - paid by 41% of companies for Audit Committee membership and about 25% for service on the Compensation Committee and Nom/Gov Committee. Median committee member compensation was $14K.
The trend of eliminating meeting fees in favor of a fixed retainer pay structure continued, with just 10% of companies providing meeting fees in 2020 compared to 12% in 2017.
See “Pay for Company Directors Stalled Last Year, but That Is Likely to Change” (WSJ) and additional benchmarking data on our Director Compensation pages.
This post first appeared in the weekly Society Alert!